Festive season brings no cheer as retail growth falls short of targets
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KUALA LUMPUR, March 14 — The traditional bumper Christmas period failed to make up for the retail sector’s lacklustre 2017, with the Malaysian Retail Industry Report showing fourth quarter growth was below forecasts.
In the report prepared by Retail Group Malaysia (RGM), fourth quarter growth rose 3.1 per cent year-on-year, which was under the Malaysian Retail Association’s (MRA) projection of 3.8 percent and RGM’s 4.5 per cent prediction.
“Rising cost of living continued to deteriorate the purchasing power of Malaysians,” the report said.
The languid fourth quarter performance — traditionally the strongest of the year — meant that full year growth for physical retail was just 2 per cent, significantly below the benchmark of the country’s 5.9 per cent economic expansion in 2017.
The findings also dovetail with a Financial Times report yesterday on the glut of retail space, in which it said Malaysians were increasingly shifting to online shopping, which also recorded a growth of over 20 per cent last year.
Supermarket and hypermarket sub-sector performance — the worst-performing category with a -2.7 per cent quarterly and -3.2 per cent full year growth — caused the most drag to the retail sector.
However, retailers are hopeful that sales during the just-ended Chinese New Year period will set them off to a good start to 2018.
MRA members are projecting a 5.4 per cent growth in the first quarter of this year, although the full figures are not yet available.
RGM also believed that Malaysian consumers will resume spending once the general election is over.
The 14th general election must be called on or before June 24, after which Parliament will automatically be dissolved and polls held within 60 days.
“Consumers spending may improve further post-election as Malaysians will focus on their own economic future and release the pent up demand,” it said.