Retailers in Valletta and Sliema are largely disappointed by the performance of the summer sales, operators have told The Sunday Times.
Business owners in the capital believe Maltese shoppers have stayed away as they are under the impression accessibility is difficult while the Valletta regeneration project is under way. In Sliema, retailers blamed increased competition and customers’ limited spending power.
An official for the GRTU, the Chamber of Small and Medium-Sized Enterprises, told The Sunday Times that while many fashion retailers were currently overseas buying winter stock, several were complaining business had slowed.
Some were particularly unhappy at the way the main retail season had been squeezed by a few stores’ impatience to kick off their sale period.
The official pointed out it had become the norm for most fashion retailers to feature a year-round in-store ‘sales corner’ to attract customers.
Jeweller Paul Fenech, president of Valletta’s Republic Street Business Community, was upset that some reports had given the impression that retail activity had been positive.
“We have never been contacted for information and we doubt some surveys were scientific. They certainly do not reflect reality,” he said on Friday. “The situation is not rosy at all in my own line of business and for retailers in Republic Street. If serious action is not taken in Valletta’s high street, we will start to hear about consequences.”
Mr Fenech, who operates 21 points of sale across the country, said business was becoming tougher as the slowdown, which reached Malta late but was now two years old, had started to bite. Customer spend at his own jewellery stores was in the main limited to the €60 to €100 bracket. People were also taking advantage of current initiatives within the jewellery trade and were selling their old gold to retailers “to make ends meet”.
As authorities talked about records in tourism, Mr Fenech stressed it was important for the numbers to be divided into categories. Quality tourists, he said, had diminished in volume. Cruise liner passengers with high spending power should leave considerable amounts of money behind and he urged the authorities to work to attract better quality cruise liner passengers by bringing operators in the higher end market to the island.
Mr Fenech said Valletta’s business community supported the project to regenerate the capital but the elimination of hundreds of parking spaces within the city had had a negative effect on turnover.
“The habits of visitors to Valletta are changing,” Mr Fenech said. “People believe it is easier to park in Sliema, and business in the city has dropped even further this year.
“Something is wrong. If the public transport reform is not tackled properly, we are worried it could deal commercial activity here another blow.”
Sliema Business Community Association chairman Christine Pace, herself a fashion retail chain operator, said sales had been disappointing because of different factors. A massive increase in competition and fewer tourists had left their mark, and the general spend had decreased.
Ms Pace said sales would not run for longer than in previous years as retailers could now start planning stock holding by buying less quantity and having a smaller amount of markdown stock at the end of the season. The international brands pushed in with new season stock as early as the launch of the sales period, so retailers needed to sell quicker to ‘clean out’ and start selling at full price again.
“Stock management is imperative in trading times like these,” Ms Pace stressed, admitting the association had received feedback about retail seasons becoming shorter.
Leonard Cassar of The Warehouse Group, which operates stores for Levis, Diesel, Kookai and Fred Perry in Valletta and Sliema, agreed that Maltese customers were shying away from the capital. However, he believed foreign visitor numbers had increased in Valletta’s Merchants Street where his stores are located.
He said the group had resisted the temptation to hold major sales for years, instead maintaining a strategy focused on lower margins to make regular pricing more attractive and fairer on customers. The group, however, had recently opened an outlet in Attard where the previous year’s stock was available at considerable discounts.
Mr Cassar admitted he might eventually have to relent and hold in-store sales, but was disappointed to see that some retailers kicked off sales as early as June.
“In Italy, there are strict rules on when sales periods start and end, and maybe the Maltese retail community should consider such a measure,” Mr Cassar explained. “Early sales are a UK trend – the reality is the UK is selling to the world, Malta is mostly selling to the Maltese.
“Fashion retail has become a challenging sector. Customers are spoilt for choice in a market where major brands from the UK, Italy, Spain, Greece, and Turkey are available, and it would be fair to say there is over-supply. International brands are very familiar with Malta now and expect franchisees to have a presence in both Valletta and Sliema.”
A spokesman for a fashion retailer operating in both locations who preferred to remain unnamed was, however, pleased with the group’s performance, describing sales which kicked off in early July and will run to mid-September as “slightly better than last year”.
The spokesman said sales and promotions were part of the chain’s strategic plan and were initiated at the appropriate time in accordance with the business’, franchisers’ and customers’ needs. New stock for most brands was always in store before sales kicked in, he added.