The Christmas sales survey conducted by the Chamber of Small and Medium Enterprises - GRTU is considered by many as an important barometer of the consumers' mood in this most active trading period of the year. This year's results, showing a drop of about 25 per cent in Christmas shopping expenditure, seem to indicate a deterioration in households' inclination to spend money as a way of celebrating the year-end.

The public sentiments on the short-term economic prospects are undoubtedly subdued due to the recession and the imminent increase in energy-related services. In these sobering circumstances, Maltese consumers, like others throughout the Western society, have rediscovered the value of thrift. This often reflects itself not only in reduced expenditure on non-essential items but also in a shift to spending on items and services that are perceived to give better value.

Supermarkets are reported to have had a good turnover during the Christmas period. This seems to indicate that consumers have preferred to celebrate by cooking meals at home rather than pay what they now consider as an excessive premium for being served in a restaurant.

The growing trend of starting winter sales on Boxing Day rather than in early January also confirms that both shopkeepers and consumers are being very pragmatic on exploiting this trading period. For many consumers value-for-money has become a more important priority than the short-lived excitement that comes with impulsive buying in the run-up to Christmas.

One must also not ignore the changing social trends that are affecting the way we go about procuring the goods and services we need. Electronic commerce is gaining in importance in every country and increasingly Maltese consumers are using the internet to do some of their shopping. They find that the local physical market for such goods has serious limitations, both in the choice they offer and the value they deliver.

These "market imperfections", as they have been euphemistically labelled by the Governor of the Central Bank, are now irritating enough to force consumers to overcome the inertia that favours shopping locally. Consumers can now browse on their computers to procure the goods that they need at the best prices. The easing of transport and Customs clearance has encouraged people to beat inflation by shopping internationally.

The size of the local market is indeed small and this affects the dynamics of free trade and competition. However, suppliers of goods and services need to adapt to the changing social trends. One can hardly blame consumers for being more careful in how they spend their money and for looking beyond the physical limitations of the local market.

With the free movement of goods and services within the EU becoming a feasible option for local consumers, the trend to participate in the much broader European market is irreversible. If local suppliers of such services fail to meet the expectations of the better educated and informed consumers, they can only expect to continue to face a gradual decline in sales and profitability.

The wholesale and retail sector has traditionally been an important motor of the Maltese economy, especially since it generates considerable employment. But no amount of navel-gazing by the commercial community can move the clock backwards to the time when consumers had to bear the brunt of limited competition by paying higher prices.

Providing value-for-money is the name of the game.