Christmas set to remain buoyant even as prices up 9%

Commercial activity is expected to be strong over the festive period despite being the priciest Christmas in recent years.

Marisa Xuereb, President of the Malta Chamber of Commerce, told MaltaToday that business will be buoyant during the first Christmas since 2019 without COVID-19 restrictions.

This despite that pre-Christmas prices are up 9% since 2019. October’s inflation index shows prices for the season are at their highest.

“National inflation statistics show that prices have increased significantly year-on-year,” Xuereb said. “The cost of services has also increased significantly over the same period.”

Xuereb said this is down to salary increases in certain sectors, “which means that the purchasing power of some consumers is keeping up”.

Nonetheless, she noted that this is the first unrestricted Christmas since 2019. “People are eager to party and celebrate Christmas as they were used to doing before the pandemic. So business is generally upbeat.”

In 2020, social distancing measures in restaurants and catering establishments were in force while bars and każini were forced to close up during the Christmas period. Then in 2021, the COVID-19 Omicron variant meant that medical masks had to be worn in all public places, open and closed, throughout December.

“Some pockets of retail may be feeling the brunt of the permanently increasing trend of online shopping and that of people saving their shopping budget for when they travel,” Xuereb said.

Indeed, an EY Global Future Consumer Index report showed that consumers are foreseeing a worse outlook, meaning they will likely cut back on discretionary spending, gifts, and celebratory food and drink. Retailers and brands will have to throw their efforts into their marketing strategies to win spend at a time of reduced demand and higher competition.

“But commercial activity is still expected to be strong overall, though with some shifts in consumption patterns that reflect changing priorities and lifestyles,” Xuereb said.

Foodstuff prices are still seeing the higher increases among the basket of goods, mainly refined oils, vegetables, sugar and pasta.

But anyone looking to buy their loved ones some clothing for the Christmas period could sense an increase in prices there too. Men’s outerwear prices increased by 13% across the years for the October period – the highest increase in the clothing category. In comparison, women’s outerwear increased by 6% across the same period.  Dry cleaning services increased by a similar 6%, while men’s footwear prices increased by 4%.

The only price decreases since 2019 in the clothing category were in men’s underwear and children’s footwear. Prices for women’s footwear decreased during the pandemic but has since risen back to 2019 levels.

For those seeking a quick hair makeover before the Christmas parties begin, prices are up 15% since 2019 on hairdressing and personal grooming services. The prices of make-up, hygienic articles and toilet preparations are also up 7% since the same year.

But those buying gifts for younger ones are in luck, as toy prices have risen by a marginal 0.5% since the last pre-pandemic Christmas. Entertainment and cultural visits also dropped by 1% in October compared to 2019.

Meanwhile, green-thumbed shoppers looking to buy some plants and flowers for the festive season faced October prices that are 6% above 2019 levels.

At the same time, the prices of jewellery, watches and clocks are up 12%.