Retail sector grapples with labour shortages and rising wage pressures – report
Wage increases ranged between 5% to 6% in 2024, with further upward movement expected this year
Malta’s retail and wholesale sector is under renewed pressure as businesses face persistent labour shortages, wage inflation, and a shifting competitive landscape, according to misco’s newly released Salaries & Benefits Report 2025.
The 2025 study presents data for 88 distinct roles, structured across 13 functional sections, with direct input collected from employers during April and May 2025. The robust sample represents 5,960 employees, which equates to 18.6% of the full-time workforce in this sector, ensuring a high degree of validity and relevance.
The report shows how the sector remains Malta’s largest employer, accounting for 11% of all jobs (32,043 individuals) and 12.5% of all registered enterprises. In 2024, it generated a staggering €3.56 billion in Gross Value Added, or 17.16% of the national total.
Misco’s research shows that wage increases ranged between 5% to 6% in 2024, with further upward movement expected this year, albeit at a more moderate rate of 3% to 6%.
“The retail and wholesale sector has been a key pillar of Malta’s economic resilience, but it now stands at a crossroads,” said Lawrence Zammit, director at misco.
“While firms are under strain from both staffing shortages and mounting cost pressures, this report should provide the data they need to take informed, fair and sustainable decisions for their future.”
High turnover continues to characterise the sector, particularly among frontline roles. Interestingly, misco found that salary bands for these positions remain relatively narrow, a sign of standardised pay practices. This is largely attributed to the reliance on Third Country Nationals (TCNs), who often have limited bargaining power.
Adding to the pressure is intensified competition from foreign-owned retailers, especially large supermarket chains, and online shopping from foreign distributors. Many local operators argue this creates an uneven playing field, eroding profitability and distorting market pricing.
The sector has also undergone consolidation. By the end of 2024, a net 1,100 micro-operators had shut down, while 10 medium-sized businesses expanded their presence, a shift that is reshaping the competitive landscape.
Despite the challenges, misco forecasts moderate growth ahead, underpinned by domestic demand, tourism, and investment in digital transformation.
“Nevertheless, firms must remain agile in the face of ongoing pressures, including staffing shortages, rising operating costs, and intensifying competition. Those who invest strategically in workforce development, efficiency, and innovation will be best positioned to succeed in the years ahead,” added Zammit.
This article was first published in The Corporate Times.