GRTU’s 2015 Business Performance Survey shows an overall positive result which to a great extent reflects Malta’s economic achievements. This is especially when considering an increase of over 10% of respondents reporting improvements over last year, when compared to the feeling expressed by enterprises in the 2014 Business Performance Survey.
In 2015, the positive feedback submitted by businesses supersedes the negative feeling both when businesses assess their overall performance and their sales during the festive season.
GRTU however believes that the figure of 25% of total respondents reporting a negative going of business is not an insignificant one and merits a thorough analysis to assess what the underlying issues causing this disparity are. GRTU is also not satisfied with the 27% of enterprises that felt that they remained in the same situation of last year because the economic performance of the country should have translated into improvements across the board.
Enterprises outlined a number of factors that they felt contributed directly to their overall performance in 2015. Interestingly, even though the results of the survey are generally positive, respondents mention a higher number of negative factors and some elements are even cited by businesses as having had a negative contribution while others attribute the same elements to their positive performance.
An extended period of good weather was frequently mentioned as having had the strongest positive impact on the going of their enterprise because people were encouraged to go out and shop. The weather was however also seen in a negative light by businesses that do better when the weather requires the thicker clothing they sell. Another main positive factor was the successful strategy adopted by the enterprises themselves, including advertisement and promotion strategies, good customer care and the selection of products sold. Consumer spending power was also said to have contributed towards positive business performance.
The negative comments were both numerous and familiar, with competition being the most unfavorable factor reported. Enterprises complained about too many businesses competing for the same consumers with the same products, driving down profitability; however their complaints also include the ever-increasing challenge posed by online shopping as well as unfair competition. The issue of unfair competition is affecting businesses in all sectors. This ranges from imports that are evading taxes, the sporadic issuance of licensing and the unsustainable enforcement efforts of the authorities.
Traffic, roadworks and parking were also very common sources of complaints with a vast number of respondents arguing about lack of sufficient parking facilities in many localities, accessibility issues in Valletta, the need to increase loading and unloading bays and the need to utilize wardens to help rather than castigate.
Insights into the festive season show that the best time for business sales was Christmas Week (21st – 27th December). The introduction of Black Friday sales (27th November) were reported as a successful initiative despite takeup by businesses may have been low in its first year. As one may expect, January has been so far a slow month for business.
The survey further resonates issues and concerns which GRTU has been honing about. There is a clear need for a stronger environment towards boosting competitiveness such as initiatives to help businesses go online. One point which continues to surface as a stumbling block for outward online shopping is excessive postage costs to sell abroad. Running costs also need to be diminished to encourage competitiveness. GRTU’s call for reduction in utility tariffs would definitely be of great support to this end, allowing businesses to instead be in a better position to invest and innovate.
Access to finance remains largely an unaddressed business concern with the survey referring to bank interest charges. Administrative burdens and bureaucracy also hinder business growth.
Setting an outlook on expectations for 2016, a good 34% of businesses reported intentions to expand over the next year whilst only 5% reporting downsizing expectations for the upcoming year.