02 December 2003

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No great expectations from Christmas season – GRTU

By Julian Manduca
November is the month of the dead, and business-wise it is one of the low points in the year along with January and February, especially where retail business is concerned. As December kicks off the business community is hoping for an upswing, but not all are confident.
While many retail outlets usually sell more at Christmas time than during the rest of the year, some retail outlets told this newspaper that their expectations are not so high and Christmas orders have been downsized.
The Malta Financial and Business Times spoke to Philip Fenech, the GRTU’s Secretary General and president of its hospitality section who said: "One has to examine closely the customer base of each business and judge what proportion is dependent on tourism.
"We know that the tourism industry is going through a particularly bad patch, even if we are hoping for last minutes bookings.
"As for the retail trade this Christmas, there are those in business who are expecting more sales before the VAT increase, but there will always be some sectors enjoying greater sales and others suffering less."
In a lighter vein, Fenech said: "When people awake with their hangovers on New Year’s day they will also be aware that the price hikes start then."
But the GRTU is being careful to defend the retailers interests and has instructed its members not to round prices up when the VAT increase is included in the price structure.

"Taking advantage of the situation would be tantamount to shooting oneself in the foot," Fenech said.
Asked whether he had any feedback on importers ordering more or less in expectation of business sales, Fenech said he knew of none of his members who were ordering more than last year, although he did not discount the possibility, while most, he said, were sticking to last year’s figures or ordering less.
"I expect that some businesses will be tempted to offer very good prices or even bargain prices as they are likely to be very careful about managing their stocks and will not want to be left with high stock values after the year end."
Talking about restaurants and the leisure industry generally, Fenech was not optimistic. "One restaurant owner told me he thought last year was bad, but now has a better idea of how bad things can get. Generally booking for staff parties are worse than usual, although the last minute mentality is a trend we have noticed gaining popularity over the past years."
The GRTU man is of the opinion that what he called the "blind optimism of the past," is "fading away." The attitude is very much reflective of the Central Bank of Malta’s latest Business Perceptions Survey, which had found that the level of business optimism leading up to the referendum on EU membership has now all but faded away.
He said: "Now everybody knows we have to work to get returns, but there are some structures that are not pulling their weight." When asked to clarify, Fenech said he would only be able to do so at a later stage."
In Paceville, which is being renovated, some of the most popular night spots, including The Alley, Peppermint Park and Sabor de Mexico have not deemed it worthwhile to open during the weekdays. One popular night spot recorded its lowest sales ever Monday night. The Las Vegas of Malta looks more like a ghost town than thriving entertainment Mecca it is meant to be.
The Malta Financial and Business Times spoke to several retailers and customs clearance officers who said their import orders were down on last year, but for reasons of confidentiality the businesses preferred not to be named.
James Sapienza, a director of Sapienza’s, Malta’s leading book sellers told this newspaper he will be happy to reach last year’s sales figure for this Christmas period. "My orders for Christmas are the same as last year, when usually I order more."
Given the lower VAT rate before the year-end, it was expected that there could be a rush for white and black goods. Timothy Tabone, a director at Forestals said its orders for Christmas remained similar to last year’s and that there was a sales rush, but that it was nothing out of the ordinary.
Tabone said sales were high because of the low prices and good value of the products. "Generally people will buy white and black goods when they want them and will chose the model they like, I don’t expect a slight price change will make any difference," Tabone said.

Copyright © Newsworks Ltd. Malta.
Editor: Saviour Balzan
The Malta Financial & Business Times, Newsworks Ltd, Vjal ir-Rihan, San Gwann
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