Small shop owners urged to join hands to combat supermarket competition

Small-time retailers who are feeling the sting of competition from supermarket giants have been advised to put their differences aside and form their own cooperatives. 

Gian Giorgio Galea, the owner of a cash register store in Paola and a technical consultant to retailers, told MaltaToday that a group of food retailers in the area had followed his advice a few years ago and formed their own cooperative. 

This essentially means that they pool each other’s resources, which allows them to purchase products from wholesalers in bulk and make use of each other’s storage facilities. Galea said that around 12 food shops in Paola have now joined this cooperative, and that the concept has now spread to neighbouring Zejtun. 

Indeed, he expressed hope that the cooperatives will expand further to also include other retailers such as ironmongers and pharmacies. 

Galea contacted MaltaToday in the wake of a report by this paper on the deleterious effects of LIDL supermarkets on the sales of nearby retailers in San Gwann and Hamrun. 

Many retailers said that they were unable to compete against the German discount supermarket, which can afford to sell food on the cheap because they buy it in bulk. 

Some expressed exasperation that people are overseeing their quality produce in favour of cheaper fruit and vegetables from LIDL, which were commonly decried as “tasteless” and “garbage”. 

“In this day and age, no small business which wants to compete can go it alone,” Galea said. “In my opinion, small grocers have a strong future ahead – after all they’re the shops that housewives seek out. However, they have to hold hands and join forces; nobody else will step in for them.” 

He said that the challenge for retailers lies in learning to trust each other, a problem which he claimed is more endemic in the north of the island than in the south. 

“They shouldn’t be looking at each other as competitors. They’re stuck in an antiquated mindset, enclosed within four walls.”