KUALA LUMPUR: Malaysia’s retail industry reported a disappointing growth rate of only 2.7% in the fourth quarter (Q4) of 2018, as compared with 3.1% in the same period in 2017, according to Retail Group Malaysia (RGM).
“This latest quarterly result did not meet market expectation. Members of MRA (Malaysia Retailers Association) projected the fourth quarter growth rate in November 2018 at 4.7%,“ the independent retail research firm said in a report today.
“Year-end festival and school holiday did not contribute to better growth rate during this quarter.
“This latest quarterly result is consistent with Consumer Sentiment Index during the same period published by MIER (The Malaysian Institute of Economic Research). Rising cost of living and stagnant take-home pay continued to deteriorate the purchasing power of Malaysian consumers,“ RGM said.
For the whole of 2018, the retail sales expanded 3.9% or RM103.7 billion. Despite the three-month tax holiday, it failed to lift the sluggish retail industry.
Worth noting is that for the sixth consecutive year, the retail industry performance lagged behind the country’s gross domestic product (GDP) growth rate.
During Q4 of 2018, the performances of all retail sub-sectors were mixed. Supermarket and hypermarket sub-sector was the worst performer, while pharmacy and personal care sub-sector was the best performer during the quarter.
“Members of the retailers’ association are hopeful that their businesses will stabilise in 2019. They estimate an average growth rate of 3.1% during the first quarter of 2019,“ RGM said.
Based on its first quarterly projections of retail sales for 2019, RGM estimated a 4.5% growth rate in retail sales for this year or RM108.3 billion.
For the first two months of 2019, retail sales were lackluster despite Chinese New Year festival celebration. Q1 retail sales are estimated to grow at 3.1%.
Nonetheless, Malaysia’s retail industry is expected to recover in Q2 with an estimated growth of 4.8% on the back of Hari Raya celebration. For Q3, retail sales are expected to expand by 3.9%.
“More economic activities during the second half of this year should boast retail sales during the final quarter of this year. During the year-end period, retail sales should rise by 5.8%,” RGM said.
