This interview appeared in MONEY Magazine – Oct/Nov 2017 Issue 45
Is the retain industry finding new ways to overcome threats like online shopping and the death of the high street? Who better for Giselle Borg Olivier to ask then Abigail Mamo, the CEO of the GRTU – Chamber for Small Businesses.
- In recent years, shopping malls have become a commonplace sight in Malta and Gozo with developments opting for the ‘under one roof’ convenience approach. Is this infrastructure seen as a threat to the stand alone high street shops? Are there indications as to whether consumers prefer one over the other?
The successful development of shopping malls has certainly increased competition both in terms of numbers and quality. There is, in fact, evidence that shows that businesses in shopping malls have been faring better on the whole. This emerged from surveys carried out by the GRTU assessing the faring of business but also when speaking to individuals who have their shops in both high streets and shopping malls. With today’s brisk pace of life consumers are looking for increased convenience and better-quality family time. Within shopping malls consumers have access to numerous products under one roof, while enjoying the comfort of being indoors – whether providing shelter in bad weather, or air-conditioning during the warmer months. Time is another commodity that is highly valued, so being able to use a mall car park adds to the convenience and other added value such as easy access to public conveniences, collective entertainment, etc… Having said that, this does not mean that shops located in high streets are not in demand. We are working with these shops because they have bigger challenges to overcome in order to win the consumer’s attention.
- Data from 2015 reports that 51% of Maltese people shop online, while another report from 2016 indicates that 70% of shoppers conduct their research online before purchasing goods. What is the pull factor that encourages consumers to shop online rather than going to a retail outlet? If convenience is the reason, then isn’t that a worrying factor considering the small size of the island?
Convenience is in fact a main reason and this is understandable considering the time everyone wastes stuck in traffic and then looking for a parking space. Going out to the shops is something that needs to be scheduled and planned because it is time consuming. While Maltese businesses are increasingly being found online, these are still limited, and it’s important that local businesses do make the shift to go online because that is where the consumer is shopping. Another reality is that consumers find more competitive prices online. It’s true that cheaper prices are not the only thing that consumers look for, especially when considering boutique shops with niche products, excellent customer service, and the shopping experience – all of which cannot be replicated online; however, prices are often the deciding factor of whether a purchase is made online. Trading online poses different challenges to having a retail outlet, because nowadays it’s no longer a matter of just allowing customers to purchase your products online at the same offline price. Online, a Maltese business is competing with the ‘big boys’, in terms of economies of scale and businesses with no overheads that only have their merchandise, warehousing and delivery to compute in the price tag. The business model therefore needs to change to be competitive online.
- Most international fashion retailers now label items with a multi-currency tag; however, there are still local retailers that cover the original Euro price with their inflated Euro price. Is that legal? And do they really have the grounds to charge a few Euro extra on each item?
The Euro has been adopted as the Maltese currency since 2008 and is the only legal tender. This means that retailers are obliged to only accept this currency. As we know however, the absolute majority of retailers accept other currencies on a regular basis. International retailers sell on numerous markets with different currencies and they print standard price tags with multiple currencies. With regard to the price that local retailers sell at, that is entirely up to them. Retailers in Malta have additional costs which they have to incorporate in the price tag, mainly due to the country’s insularity and lack of economies of scale.
- What are your views on the recent trend of importing goods from Sicily? What market surveillance is in place to control such activities?
Goods can be imported from Sicily and this is being done both by businesses and consumers directly. Market surveillance is essential in this case but we do not feel we are doing enough. Market surveillance is important primarily to know what is coming into the island. At least some of the goods coming in are checked for quality – mainly for health and safety reasons – and are treated in the same way as is done with local retailers. Market surveillance is also important to guarantee a level playing field. VAT must be paid in Malta for services and goods purchased by Maltese consumers, while excise tax must be paid within days of importation.
- Recently the plight of delivery men was in the news; the traffic and parking situation in Malta is already dire without delivery vans double parking. What feasible solutions can be implemented to help them do their job without affecting other motorists?
Delivery persons find it impossible to park properly. Driving all day in the traffic, trying to find a good place to stop, and then having to carry goods back and forth is a job certainly not envied by many of us. The Maltese roads are very limited and we need to be patient, understanding and sensitive to the needs of different motorists. Loading/unloading bays are by far not enough and abuse on the few that exist is not uncommon. One must consider that, come rain or shine, delivery people spend their day driving around in far from ideal conditions to deliver their goods to clients. Due to these traffic limitations, businesses have had to increase their costs by sending two delivery people with every van because the parking situation is such a nightmare. GRTU believes that we need to find ways to alleviate the pressure until more long-term solutions are implemented. People working on the road such as delivery people, chauffeur drivers and coach drivers should have a specific license with spaces identified where they would be allowed to park ‘illegally’ so as to allow for pick-ups/drop offs. This allowance would depend on the size of the vehicle, the length of the stay, and whether the driver will stay in the vehicle. Double parking might also be included as a potential ‘solution’, provided that the vehicle doesn’t create a traffic bottleneck and doesn’t park in a dangerous place, of course.
- As part of its electoral manifesto, the government promised to compensate workers for public holidays that fall on weekends; the GRTU, along with other lobby groups, have asked for real compensation. What is it that the GRTU wants to secure in this regard?
Loss of productivity is the biggest worry for businesses. Those in favour are arguing that these specific public holidays were taken away in a time of economic downturn, so now that we are experiencing an economic boom they should be given back. The argument, however, is not that simple. Even if one had to disregard the fact that, as things stand, Malta is already at the top of the charts amongst countries with the highest number of public holidays and sick leave, we are facing a human resources crisis. Enterprises are struggling with the lack of human resources and this has become the biggest challenge facing businesses today. Employing someone has become extremely difficult and expensive; so, at a time when human resources are already insufficient, it is difficult to forgo another four days of productivity next year and six days the following year. This decision impacts both large companies, where the total cost will increase into the millions, as well as small companies which don’t have excessive personnel to fall back on. The bottom line is that somebody will need to work on these days and the cost to cover this this will be significant. We therefore are looking at things in this context.
- On the 10th October, the GRTU is organising its annual half day event, with this year’s theme being ‘Let’s Evolve | Growth through Innovation’. Who is the event aimed at and what can delegates hope to achieve by attending?
On the 10th October GRTU will be holding its yearly annual conference; the overarching theme will be innovation and will be driving innovation into the businesses of micro and small Maltese enterprises. Innovation is for all business sectors and sizes and it is the key to survival in today’s competitive market and becoming more profitable. As usual the conference will be packed with practical examples for business owners to take home – whether it is taking advantage of online opportunities, developing a new idea, accessing funds, or making use of solutions provided by the private sector, enterprise owners have a lot to gain out of this half-day event. It is also an excellent networking opportunity with 200 enterprise owners all in one spot looking to take the next step. Registrations can be made online on: www.grtu.eu/registration/