PETALING JAYA: Independent retail research firm Retail Group Malaysia (RGM) has revised downwards its forecast for Malaysia’s 2021 retail industry growth rate to 0.8% from 4.0% projected in June this year after taking into consideration the lower growth in second quarter (Q2’21) and the revision of its third quarter estimate.
For Q2’21, Malaysia’s retail industry recorded a growth rate of 3.4% year-on-year (y-o-y) in sales, which was worse than the estimate made by RGM at +5.6% in June 2021.
“The positive growth rate during the quarter was due solely to the low base effect a year ago. During Q2’20, Malaysia retail industry suffered a y-o-y decline of 30.9% because of business closures,” RGM said in its Malaysia Retail Industry Report (September 2021) today, adding that retail performances during Q2’21 had been affected by a series of lockdowns.
The performances of retail sub-sectors during Q2’21 were mixed. Numerous retail sub-sectors were severely affected during this period because their physical stores stayed shut for a long period of time.
The department store sub-sector grew 18.2% and was the best performing retail sub-sector during Q2’21. It had been suffering from double-digit sale declines on quarterly basis since the pandemic started.
The other specialty stores sub-sector (including photo shops, fitness equipment stores, sporting goods stores, stores retailing musical instruments, optical stores, shops selling baking ingredients as well as direct selling firm) suffered a 41.4% drop in retail sale and was the worst performing retail sub-sector during Q2’21.
For the first six months of this year, the retail sale growth rate contracted by 4.4%, as compared to the same period a year ago.
Meanwhile, members of Malaysia Retailers Association and Malaysia Retail Chain Association project an average growth rate of -15.1% during Q3’21. Physical stores of majority of retail trades were shut during the first half of Q3’21. Except for operators of mini-markets, convenience stores and cooperatives, retailers in all retail sub-sectors foresee downward movement in their sales for the next three months.
Retailers in the personal care sub-sector are expecting their business to plummet by 54.3% in Q3’21. This will be the worst performer among retail sub-sectors during this period.
Operators of mini-markets, convenience stores and cooperatives are anticipating a mild recovery in their sales with a growth rate of 5.9% during Q3’21.
RGM expects the retail industry to gain momentum in its recovery by the end of this year and maintains its estimate at 12.7% for Q4’21, compared with the same period a year ago.
For food & beverage (F&B), cafes and restaurants recorded negative growth of 10.9% y-o-y during Q2’21. Cafe and restaurant operators foresee their business dipping further for Q3’21, and are expecting a decline of 30.2% compared with the same period last year.
Business for take-away, kiosk and stall F&B outlets climbed 37.5% during Q2’21 and these operators are anticipating marginal growth of 1.5% during Q3’21.
