Malaysia retail sales fall

While Malaysia retail sales for the first quarter have taken a tumble, a decline was on the cards following the introduction of GST on April 1 last year.

This boosted sales of big-ticket items in last year’s first quarter, and a year after the introduction of the tax consumers are still holding back on spending, according to a report by retail consulting firm Retail Group Malaysia.

“Further increases in the cost of living in the near future will worsen the situation,” says the report, which shows a 4.4 per cent fall in sales for the retail industry in the quarter compared to 4.6 per cent growth a year earlier.

As well as the high pre-GST sales last year, weak Chinese New Year sales in February led to the dramatic comparison. While negative first-quarter growth was expected, the results were below the industry expectation of a 4 per cent drop, says the report, based on interviews with members of the Malaysian Retailers Association (MRA).

Further undermining Malaysian consumer spending power has been a gradual increase in the prices of retail goods and services this year, partly attributable to the weak ringgit.
“Retailers continued to depend on heavy price discounts,” says the report. “As a result, their profits were eroded.”


During the first quarter, the only sub-sector not to record a decline in business was “Other Specialty Retail Stores”. The “Department Store cum Supermarket” sub-sector had negative growth rate of 7.3 per cent – the worst performance among the retail sub-sectors. Supermarkets and hypermarkets had their fourth consecutive negative quarter with a 4.2 per cent dip.

Retail Group Malaysia says MRA members expect their businesses to return to black during the second quarter of this year with an average growth rate of 9.9 per cent. The estimated growth rates for the third and fourth quarters are 5 and 5.5 per cent.

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