High rents are killing small retail businesses in Valletta, shop owner says

High rents are killing small retail businesses in Valletta, the owner of two shops located in the capital told BusinessNow.mt, highlighting the need for more Government support for the sector.

Melanie Cremona, the owner of Chloe’s Closet & Friends – a clothes and items shop for children – and Vallettina Atelier – a woman’s boutique, described the challenges small retail entrepreneurs face in the capital city. She spoke to this newsroom following statements made by the President of the Association of Catering Establishments, Michelle Muscat, who highlighted the need for a better mix of restaurants and retail options in Valletta.

Ms Cremona wanted to highlight her concerns about the state of the retail sector in the city. She explained that rents for businesses, especially in Valletta, are “very high”. She said she was one of the lucky ones to find outlets to rent at a decent rate.

To highlight the cost of rent in the capital, she said that the most popular street in Valletta, Republic Street, has rents “starting from around €500 per day.”

Retail shops already have to compete with online shopping and companies shipping from abroad, she explained, so shops cannot have high prices and high margins. She said that one of her businesses imports products from Scandinavian countries, which are made of organic cotton, bamboo fibres and made from recyclable materials. These are products that last but are not cheap to bring in, she added.

“Rents in Valletta are really high, so when you have high rents with low margins, it’s no wonder so many retail shops are leaving Valletta. And that is why everyone is opening up catering establishments.”

She explained that property owners prefer to rent out to catering establishments because they can charge higher rents and business owners prefer to open up a café or restaurant due to the higher margins they can get, she said.

Aside from rents, there are also staff costs, air conditioning costs, shopping bags, etc, the shop owner said.

Ms Cremona welcomes that Valletta was brought back to life over the years, but explains that she would like to see it l like look more similar Taormina, in the sense of having a better balance of retail and catering. “Beautiful streets filled with restaurants and cafés, but also lovely boutiques and quality shops that make simply walking through the town an experience in itself.”

She spoke of the need for more Government support for small retail businesses.

As one example, she said that there is Government property in Valletta which isn’t used, urging Government to open them up to be rented out for retail purposes, but explained that small business owners don’t have the deep pockets necessary to tender for large buildings.

Looking outside of Valletta, ms Cremona indicated that rents could also be problematic for small retail stores. “I used to have another shop on Tower Road in Sliema, but I had to close it down, it was too expensive for the size when compared to the footfall,” she said. She added that in Valletta there is higher footfall due to cruise liners.

But “Valletta is a tourist-centred city,” ms Cremona said, noting that Maltese don’t travel to the capital city for shopping. She said that “tourists come to experience our beautiful capital, and they deserve a complete experience – culture, dining and good-quality shopping,” and that a better mix could be another reason for Maltese to travel to the city.