RGM revises downward retail forecast for 2017

PETALING JAYA: Independent retail research firm Retail Group Malaysia (RGM) has revised its annual growth forecast downwards from 3.9% to 3.7% for the Malaysia retail industry in 2017, the second revision since end of last year, on the back of lower purchasing power.
RGM also revised the third quarter (Q3) growth rate estimate from 5% (made in June 2017) to 4%. This is higher than the latest projection made by Malaysia Retailers Association (MRA) members.
Q4 growth rate’s estimate remains at 5.5%, taking into consideration the growth of 0.3% achieved during the same period a year ago.
“For the rest of this year, the rise of our purchasing power will continue to fall behind the increase in prices of retail goods. More retail goods are expected to raise prices because of higher fuel prices in recent months,” said RGM.
Based on this latest revision, the total sale turnover for Malaysia retail industry in 2017 is estimated at RM101.4 billion, according to RGM.
Retail sales contracted 1.2% and expanded 4.9% for Q1 and Q2 respectively.
RGM said full recovery of the Malaysian retail market is highly dependence on external economic demand and ringgit performance for the rest of the year.
Meanwhile, it said members of the retailers’ association are not optimistic on their businesses in the next three months. They estimate an average growth rate of 2.9% in Q3’17.
RGM said the Q2 results met market expectation as members of MRA projected 4.8% growth.
After a dismay performance in first three months of this year, the retail industry managed to recover slightly in Q2. The Hari Raya festival that began at end-May boosted retail sales during this period. Malaysian consumers shopped more with heavy price discounts offered by retailers throughout the country.
For the first six months of this year, the retail sale growth rate was 2.5%, as compared to the same period a year ago.