At least 13 new supermarkets set to open after PA approvals

A fresh wave of supermarket development across Malta and Gozo is on the horizon, with at least 13 medium-to-large outlets in the pipeline following a series of planning approvals issued over the past few years.

An analysis of approved PA applications shows that the projects – many tied to well-known developers – range from being part of sizeable mixed-use complexes, including apartments and parking spaces, to standalone discount stores by international chains.

Among the large supermarkets set to open within the coming weeks and months are a Eurospin outlet in Marsa and a new Greens in the Centreparc complex in Qormi.  A PAVI/PAMA outlet at db Group’s St George’s Bay project is slated to open next Easter.

Another large-scale development that received the green light from the PA in November 2024 is a complex that includes a supermarket, 26 apartments and a multi-level car park on the Birkirkara bypass.

Burmarrad, already served by a Lidl outlet, will get another supermarket after plans to develop a large four-storey shopping complex located on ODZ land, replacing an unused car repair and rental depot, were approved in May.

Lidl itself will continue its geographic spread, with a new outlet approved on the site of the former General Soft Drinks factory in Qormi, around one kilometre from its store at Centreparc and 2.5 kilometres from the recently opened outlet in Żebbuġ.

In St Paul’s Bay, a major redevelopment of the Empire Cinema site will include a hotel and supermarket.

Over in Gozo, another supermarket on the outskirts of Xewkija, just 200 metres away from another Lidl, was approved, as was a supermarket (plus apartments) on ODZ land in Għajnsielem and a supermarket/butcher in Xagħra.

Other localities that will see new supermarkets being built are Żabbar, Mosta and Mellieħa. Two applications in Żebbuġ and Kirkop are still at the review stage, although this list is not exhaustive due to the difficulty of filtering searches for specific terms on the PA website.

Is the growth sustainable?

In an opinion piece in Times of Malta, Farsons CEO Norman Aquilina expressed concern that the rapid increase in the number of supermarkets is unsustainable and could lead to a bubble.

“The supermarket scene needs a shake-up if we want to avoid a more far-reaching market shakeout. As openings continue to pile up, indicatively reaching unprecedented numbers, the question on everyone’s mind should not just be on who is opening next but who is now likely to close,” Aquilina wrote.

While saying that retailers’ ambitions are understandable, the CEO asked whether the new openings were backed by proper assessments and well-articulated business plans or were “retaliatory moves intended to outpace competition resulting in surplus retail space”.

Aquilina called on retailers to adopt a more balanced approach when considering extending their retail footprint, and on distributors to ensure they are “well-placed and prepared to competitively disrupt or depart”.

Economist Clint Azzopardi Flores is less concerned about the expansion. Assuming the International Monetary Fund’s prediction that Malta will remain one of the fastest-growing economies in the eurozone over the next five years, and the recent EY survey showing high business confidence in Malta are true, then worries about a bubble are unfounded, he said.

“There is also the fact that Malta’s population and tourism numbers are expected to continue growing, so it isn’t unreasonable for supermarket chains to want to expand. They’re simply following the market.”

His concern, rather, is over the country’s infrastructure and societal well-being. “Even one large supermarket has a significant ripple effect on areas like traffic, emissions, noise pollution, health services and even rent, since more workers are needed both to build and service these stores,” he said, citing the db Group’s St George’s Bay project as having a significant impact on the surrounding area.

“Having said that, as an economist, I would prefer to solve these sorts of problems than high unemployment,” Azzopardi Flores added.

Do consumers win?

Asked whether the supermarket boom is beneficial to consumers, the economist said that, in theory, competition leads to better choices and cheaper prices.

“This is especially true of foreign brands like Lidl and Eurospin, which have their own supply chains and therefore do not rely on local suppliers, who have more of a stranglehold over prices.”

The biggest losers, he observed, are arguably Malta’s small independent supermarkets, which cannot hope to match their larger counterparts’ ability to keep costs low and their revenues high.