Italian supermarket giant to open outlets in Malta

Italian supermarket giant SISA has concluded an exclusive franchise agreement with an SMS subsidiary, SISA Malta, which will open its first outlet at the Baymart site in Spinola within two months.

Another outlet will soon follow in Sliema, with others planned over the coming years.

SISA has 1,595 outlets in Italy and has a range of 500 SISA-branded products covering all the categories on sale.

SISA Malta director Simon Mifsud explained that the retail sector in Malta is dominated by agencies, a set-up that will change once Malta joins the EU. "If an agent does too well, the principal will be encouraged to cut him out and open in Malta directly. If an agent does not do well, then the principal will just change him. The retail sector is going to have to change its approach and to have more direct relationships with suppliers," he said.

"However, consumers demand choice, so SISA will not only stock its own label but others as well, local and foreign."

In Italy, SISA's own label accounts for between five and six per cent of its total sales.

Mr Mifsud explained that many of the SISA products were made under licence by well-known companies but were sold at more competitive prices. SISA products cannot be sold to other retailers.

SISA Malta is being set up with a Lm250,000 fully paid up share capital, with a subsidiary of SMS as its shareholder.

SMS started out about 50 years ago in shipping but has since expanded to include travel and tourism, insurance, hotels and airfreight. This is the company's first foray into retailing.

Mr Mifsud is excited about the possibilities that might open up for local companies as a result of SISA's strong distribution network.

"We will have trailers coming down full from Italy and going back empty. We are already talking to companies that could manufacture under licence for SISA, which could fill the containers on their return journey."

He explained that food manufacturers faced two main problems - a limited amount of production which made it difficult for them to meet the huge quantities required by supermarkets and access to a distribution network. Manufacturing under licence would solve both these problems.