Malta’s dense restaurant scene adds pressure as profits dip

A recent survey conducted by the Association of Catering Establishments (ACE) found that restaurateurs are facing a dip in profits.

On average, respondents said that they experienced a three per cent decrease in profits compared to the previous year, driven by an anticipated 1.1 per cent reduction in sales.

15.7 per cent of respondents reported a decrease in profit between 6 to 15 per cent, meanwhile 8.1 per cent of respondents reported a 16 to 25 per cent decrease in profit.

Notably, 27.8 per cent of participants indicated that their sales figures remained consistent with last year’s levels.

The survey also revealed that over half (55.9 per cent) of respondents had invested in their establishments within the last year, covering the period from July 2023 to June 2024, although 78 per cent of responders do not intend to invest in a new restaurant venture in the coming months.

Given that labour costs make up a significant portion of restaurant expenses—accounting for 26.6 per cent, according to ACE's survey last year—it's no surprise that many business owners are focusing on managing operational costs rather than pursuing expansion.

In terms of customer spending, the average spend per customer across all establishments was reported at €25.89. However, this varied significantly by the type of venue. Fine dining establishments saw an average spend of €55 per customer, while patrons of cafeterias or snack bars spent an average of €14.20.

Despite these challenges, Malta remains notable for its dense restaurant landscape. According to Malta Tourism Authority, as of September 2023, there were 2,638 food establishments operating on the island. Hence, the country boasts a higher concentration of restaurants than major global cities like New York, Paris, or London. This abundance of restaurants adds further competitive pressure, potentially contributing to the recent dip in sales and profits for many businesses.  

This study, which has a 95 per cent level of confidence, was carried out in September 2024, where 200 people were contacted through telephone and email. It focused on the first two quarters of the year, covering the period from January to June.

It was led by statistician Vincent Marmara, a well-known figure in Malta for his data analysis expertise.