‘What businesses are worse than 2008 rece

Earlier this year, the European Commission’s economic forecast predicted strong growth ahead for Malta, so much so that Malta’s economic growth over the next two years is expected to be the highest in the EU. This report was published before the arrest of

The huge drop in sales being experienced by business owners is worse than what Malta experienced during the EU recession in 2008, according to Abigail Mamo, chief Executive officer of the GRTU-Malta Chamber of SMEs.

Last week, the GRTU published a survey where 65% of businesses reported plummeting sales. The survey found that 15% of respondents reported a drop of more than 50% in sales. The GRTU said that business sales have dropped everywhere with Valletta shops feeling the brunt. “Political instability is killing businesses,” the organisation said.

In an interview published on Sunday on The Malta Independent on Sunday, Mamo said: “We have never seen such numbers. It was unprecedented and the level of change is very big.”

She said that when Malta went through the effects of the EU recession in 2008, the island suffered, but the numbers do not even come close.

“At the time of the recession we had reported that there was a level of negativity but the Maltese economy still remained resilient even though it was obviously affected. Some sectors were affected more than others back then, especially export-orientated sectors, but this is affecting everyone across the board and the blow is very big. The difference is tremendous and very worrying.”

Mamo said businesses had high expectations for Black Friday sales and expected sales to be in line with last year’s, but this was certainly not the case. While many hoped that the pace would pick up in the following days, business is still very slow, she said.

How was business for SMEs prior to the current situation?

On average, the year was very good. We had seen some small pockets which were not doing as well as the others but, on average, it was a very good year. 2018 was an unexceptionally good year, so if you compare last year to this year, you will see a slight diminishing of economic activity. The slight drop was expected, since economic trends showed us that Malta’s GDP was growing a lot and that it would slow down just a little, which was also useful, because Malta’s growth was too accelerated.

This economic pace required a huge amount of resources, so slowing down was good. Other than that, 2019 was a very good year.

Black Friday and Christmas are both extremely important dates for retailers and entrepreneurs. What was the expectation by business owners, and what is the reality they are facing?

Expectations were very high. Last year, Black Friday was one of the most important days, in terms of shopping, so this year retailers were expecting something similar. There were more preparations, as some businesses felt they were not prepared for the amount of sales they experienced last year. They expected bigger sales figures this year. You could see also the amount of adverts which were placed for Black Friday sales and now we are seeing a repeat with Christmas adverts.

People have planned well in advance for this. Black Friday fell short. There were some areas that did do well, but sales did not hit expectations − it was not the best day of the year. Back then, we were hoping that business would recuperate, since before Black Friday started, the best days to go shopping were 8 and 13 December, and the days leading to Christmas. Businesses were hoping that the pace would pick up during this time, but business is still very slow.

GRTU published a survey in which 65% of businesses reported plummeting sales due to the instability during the past two weeks

Yes, the 65% was coming from different business sectors. They were not just retail but also services, even some importers and manufacturers. This number came from all over Malta, a small percentage was coming from Valletta, and of course we took Valletta out of the equation to see the difference. The overall trend was negative; in Valletta it was very negative, with most businesses reporting a 50% drop in sales. Even businesses around Malta reported a loss in sales. 15% of these 65% said that it was over 50% in loss as a whole. We spoke to numerous businesses after the survey and the trend continues. Business is slow for enterprises which have never had issues before. Even when we see the amount of activities being cancelled, these activities generate a lot of income for businesses and SMEs and everyone has been hit quite hard.

We are even seeing major companies cancelling Christmas parties and a number of Christmas activities have been cancelled or postponed…

If the situation we find ourselves had come after Christmas or after the sales, it would have still been very worrying, but it would not be during the most important months of the year; the months which make or break a year for business.

Businesses might go into very big losses and some might not make it because of what is happening now. Businesses that are solely based in Valletta, especially, are going through a very tough period.

How do you think all this is going to affect Malta’s business and economic reputation?

Lower sales are something affecting us in the immediate term, but it also has a long-term effect.

More and more reports are coming out about what’s happening here, painting a very poor picture of the situation we are in. We are going through a crisis, which was picked up very quickly by international media.

Malta was always regarded as a miracle small economy and our miracle was based on the good reputation we have and other incentives that were put in place, such as attractive tax incentives and making it easy for foreign businesses to see us as their next investment.

Now, our brand still speaks for