The survey carried out by the Malta Chamber of Small and Medium Enterprises – GRTU among its members revealed an encouraging upward trend in business for retailers over the Christmas period.

While December is traditionally a strong month for the retailing sector, the performance of many businesses is also affected by people’s purchasing power levels and the existence, or lack of, a “feel good” factor in the country.

The past three years have been particularly tough on the taxpayer. The burden on many families increased, the cost of living went up and many people found that their pockets were increasingly lighter at the end of the month.

Last year, although the burdens still existed, the surcharge on water and electricity bills proved to be a bitter pill to swallow and inflation showed an upward trend, confidence picked up slightly in the third and final quarters, possibly contributing to the positive GRTU survey result.

According to the Chamber, 55 per cent of those interviewed said they did better than last year. Chamber director-general Vince Farrugia said he expected a better performance this year. However the chamber was still satisfied that commerce had picked up in December. With only 19 per cent saying that business had been worse than the previous year – some of them probably having failed to adapt to changing consumer trends – this indicates a growing sense of optimism.

That sense of optimism, however, must not detract from the reality that exists in the marketplace today. A change in fortune for local businesses is more than welcome, but the performance registered in December needs to be maintained in the coming months as well.

This is the challenge facing the GRTU’s members and the government. And this is why 2007 will be such a key year for the administration. The tax cuts announced in the budget will come into effect this year, hopefully improving take-home pay for a good cross-section of the population. This is but one of government’s measures to give back something to the taxpayer.

The GRTU survey focuses only on retailing during the Christmas period, excluding sales, and the results of the GRTU annual business survey for 2006 will give a clearer indication of whether business did pick up last year.

That said, the results from the Christmas survey give a good indication of consumer trends and how people are spending their money. Not surprisingly, retail outlets selling electronic gadgets like plasma and LCD screens, mobile phones, and so on, all reported improved sales over Christmas. The same was said by retailers of clothing items, jewellery and gifts. Restaurants also reported improved business between Christmas and New Year. The relatively negative results reported by clubs and bars, shoe shops and supermarkets/grocers/butchers reflect, in part, changing consumer tastes.

What is encouraging is that the Park and Ride scheme has been shown to have boosted commercial activity in the capital, proving that the initiative, with further fine-tuning, is just what was needed. Also encouraging is the positive results obtained by retailers in those towns and villages that organised activities and decorated their centre. Local councils would do well to follow the example set by Mosta and Paola.

The Notte Bianca and Notte Magica initiatives, although held before and after the Christmas period, have helped to keep business alive in the capital during off-peak periods, and the GRTU’s idea to extend the idea to other towns and villages merits consideration.

Cities thrive when there is a regular level of commercial activity throughout the year, and the government appears to have found the right formula to keep Valletta alive. More than Lm800,000 was spent during the Notte Bianca activity in October and retailers will be hoping that the Notte Magica, and other events planned for 2007, will see a lot more revenue going their way.

That, however, all depends on people feeling more positive about the future, seeing a tangible improvement in their take-home pay and seeing the burden on their family reduced to more manageable levels.