The Malaysian retail industry has seen a 1.1% dip in sales in the third quarter, this is due to the decline in purchasing power among Malaysians, according to The Star, which quoted a report compiled by Retail Group Malaysia (RGM).
This was compared to the retail sale growth rate during the first nine months of 2017, which saw a 1.9% increase as compared to the same period in 2016. RGM’s report stated that majority of consumers did not receive higher take-home pays, in spite of the fact that economic performance was strong during the third quarter. As a result, the tendency to spend was low. The report added that the rising cost of living has also “deteriorated” the purchasing power of locals.
All retail sub-sectors witnessed a decline in sale during the third quarter, except pharmacy, personal care and other specialty retail stores, which saw a 6% growth. RGM’s report noted that the department store and supermarket sub-sector experienced a 3.5% decline in sale following a short recovery. The supermarket and hypermarket sub-sector experienced a drop of 5.2%, despite selling basic necessities.
In its report, RGM said it has revised its annual growth forecast for Malaysia’s retail industry in 2017 from 3.7% to 2.2%. As such, the total sale turnover for Malaysia’s retail industry in 2017 is estimated to be RM100 billion, the report stated.
RGM predicts a 6.0% growth rate in retail sale for 2018, adding that the recovery of Malaysia’s retail market is “highly dependent” on election, currency performance and external economic demand.