Claudine Cassar | Sunday, 03 January 2010

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Retailers: face the reality

Sometimes I wonder whether we have two alternate universes in Malta: two totally opposite and conflicting realities. This thought surfaced once more just a few days ago, when, during a Net news bulletin on Monday evening, it was announced that retailers had reported excellent sales over the Christmas period. However, the next morning the other alternate reality reared its ugly head – with The Times having “Christmas sales down by a quarter” as its main headline.
News should be just that – a fair and objective reporting of recent and important events. It should not be slanted this way or that and turned into political propaganda, spread for the purpose of promoting one party or the other.
It is ridiculous that if we listen to One News we are told that retailers are on the verge of bankruptcy while if we follow Net News we hear that shop keepers had a bumper season and are rolling in dough. No wonder we never reach national consensus on the issues that matter! We live in two totally different countries with different economies and different realities – or so would the political channels have us believe.
Well, I was intrigued by the apparently disparate accounts regarding the fortunes of retailers this Christmas, so I tried to understand what Net and The Times were going on about. Apparently, the truth is that on Christmas Eve there was a very brisk trade in many shops, which obviously improved the sales figures for the season. This is what Net News chose to report.
However, they omitted a very important and salient fact, which is that, notwithstanding the excellent sales on 24 December, sales as a whole were still 25% to 30% less than they were during the Christmas period last year. It would be a good idea for someone to remind the people who write these types of reports that sometimes half a truth is worse than a lie.
Anyhow, back to the retailers and their apparently dismal sales. In my opinion, there are many factors that need to be looked at here. It is obvious that people have been much more careful with their cash this year. Fears about the upcoming water and electricity bills have put a damper on even the most profligate of spenders.
However, I disagree with GRTU general director Vince Farrugia that this is the sole, or even the main, reason for the problem. I believe that local stores are losing business because they have not wised up to the fact that their competition is no longer just local but has now become international.
I was recently reading a friend’s blog, and one of her posts really got this fact home. She has a little boy who is just starting to walk and she wanted to get him the V-Tech First Steps Walker for Christmas. She visited some local toy shops where the item was priced at €61.95 but ultimately decided to buy it from where the final price of the walker was a total of €32.96, including postage and packing. The toy was delivered straight to her door and she did not have to run around like a crazed woman from store to store trying to get a good deal. She has now announced that as from next year, she will get ALL of her Christmas gifts online.
The moral of the story is that Maltese consumers are getting wise to the fact that they are not restricted to shopping from local stores any more. They can buy goods from any online store that delivers to Malta, paying much more competitive prices for the items they purchase. Furthermore, they can shop while conveniently sitting at home (or at the office) and the goods are delivered – in some cases free of charge! How many stores in Malta do you know that allow you to do that?
I have converted to online shopping a long time ago. I buy all my books and DVDs from, an eStore that has enjoyed excellent business from me over the years. I also order my groceries online and have them delivered, a luxury that saves me several hours every month.
What local retailers seem not to have cottoned on to is the fact that the Maltese are not just buying books and DVDs online. I have friends who have purchased chandeliers online and I myself have bought clothes, toys, kitchen utensils and lots of other stuff. At the moment, for example, I am busy scouting the web for a Holy Communion dress for my daughter. The current favourite costs €59 plus €12 for postage and packing. I can also get any accessories my daughter might need (tights, little bag, gloves, shoes) from the same store and have them all delivered together. How’s that for convenience?
The reality is that unless local retailers wise up their sales will just get worse year after year. Why should I brave the traffic and the parking problems in Sliema when I can buy exactly the same things online, possibly at a lower price?
I appreciate that in some cases local shops cannot compete on the basis of price because they do not have the same economies of scale that shops overseas may have – however they could at least try to offer the same type of convenient service. At the very least, they should make it possible for their Maltese customers to view and order their wares online. After all, it should be much cheaper for them to deliver items locally than it is for some store in the UK that has to send everything via air mail! Local stores could compete on the basis of speed of delivery and after-sales service, which is always an issue when one buys goods overseas.
So basically, retailers need to buck up and get informed about what their customers are really up to. Are they huddled at home in the cold using a candle instead of switching on the lights, or are they sitting comfortably in front of their PC, sipping a hot cup of tea and shopping away?

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