Retail outlets blame online shopping for stagnant sales

Online shopping, poor customer confidence and increase in cost of living where the three top reasons provided by businesses when asked what factors had adversely affected their sales during the festive season.

The findings were published in a survey conducted by the GRTU, Malta's Chamber of SMEs, to assess how businesses fared over the Christmas period.

Over 200 respondents took part in the survey, completed in four days. The highest percentage of sectors surveyed were beverage distributors, household goods, IT, jewellers, restaurants, hair and beauty salons, footwear, wearing apparel and gifts. Sliema, Valletta, St Julian's, Hamrun, Mosta, Paola and Gozo were amongst the localities surveyed.

The survey found that 37% of the retail outlets had registered the same sales as they did last year, with 46% admitting that they had not expected otherwise. A staggering 45% had however expected an improvement, which they did not have.

Over half of the respondents said they had extended their opening hours.

Unsurprisingly, online shopping was mostly blamed for the stagnation in sales, with 25% expressing their belief that this had adversely affected their sales.

Respondents said they felt disadvantaged against online shopping also because of the taxation and specific schemes advertising the delivery of goods from UK stores.

However, 22% blamed poor customer confidence, 14% the increase in cost of living while a further 14% said it was local competition.

Discount sales are always important to retail outlets if they want to see an increase in sales: 27%, marking the majority, said the reduced prices had positively affected the sales. 23% said the quality of tourists had improved while 15% said customers had more disposable income.

The results have also shown that while 36% were exclusively retailers, another 35% also imported the goods they sell directly.

"This is very much in line with the trend at EU level where retailers are now becoming very important players of the supply chain and import and distribute directly to become more efficient and control their costs," the GRTU said.

In general, the major localities such as Valletta and Sliema complained of lack of parking but those retail outlets situated in Hamrun complained that the locality suffered from lack of organisation even in relation to the distribution of Christmas decorations in the streets.

The results shows that sales pick up on 13 December, a national holiday, while Christmas Eve and its eve were "very good selling days".

With many outlets introducing different levels of reductions on Boxing Day, a number of respondents said they had been negatively affected by those outlets introducing reductions at such an early stage.

The changes to the Valletta CVA system have been welcomed by the Valletta Business community but retailers still complained that, while customers were attracted back to Valletta, there was no parking available.