Sustainability of Malta’s catering industry in doubt as survey highlights profitability as top concern

The sustainability of Malta’s catering industry has been placed in doubt as survey results from an online study conducted by the Association of Catering Establishments (ACE) found that the mammoth increase in the price of stocks required to operate a restaurant is a major concern, seriously impacting profitability.

Predictably, issues of staffing, specifically constant efforts to retain and recruit was the next largest concern.

The online survey among ACE members was conducted between January and May 2022.

Survey results show that almost 76 per cent of its respondents pointed out that their main concern is the increase in stock pricing which is seriously hindering the sustainability of the industry.

Indeed, with Ukraine being a major grain producer and exporter, and Russia’s invasion of the country halting such distribution, staple food products have exploded in price. A wide range of food products in addition to grain, such as sunflower oil, has seen massive jumps in price since the invasion at the end of February 2022.

The war further compounded inflationary pressures that had already started to be felt as the world emerged from COVID restrictions and pent up demand was released. The zero-COVID policy being pursued in some parts of Asia, such as manufacturing powerhouse China, caused further havoc on global economies and shipping routes, another cog in the machine that has been causing prices to rise across the board.

When cross comparing the period in question to the same pre COVID-19 pandemic period 71 per cent of the survey respondents reported that their sales were more or less the same, or worse off when compared to 2019.

However, when comparing the same period with the fist COVID-19 Pandemic year (year 2020), almost 65 per cent confirmed that their sales were better. Moreover, 73 per cent of the respondents noted that such improvement was also noted when comparing sales in the second year of the COVID-19 Pandemic (year 2021). 

When asked what their major concerns are, 76 per cent of the respondents noted that profitability was a major issue followed by the challenge they constantly face to retain and recruit human resources. Moreover, 41 per cent of the respondents highlighted the fact that banking and other bureaucratic hurdles are also issues of concern. 

It is interesting to note that when respondents were asked whether they would recommend that the local restaurant sector should charge deposits on their bookings to counter the problem of no shows, 60 per cent were against such measure.

When assessing the survey holistically, “it is evident that sustainability is the major issue of concern, and this is attributed mainly to the impact of the COVID-19 Pandemic together with the sudden spike in the stock purchase pricing index as well as the recurrent problem of human resources.”

The survey stresses “the need for closer collaboration between the Government and the main stakeholders in the industry. Such action is needed not only in the long term but most of all in the immediate so as to ensure the sustainability of the catering industry.”