KUALA LUMPUR: Malaysia’s retail sector, which grew 2% last year, is projected to grow 4.7%, or RM104.4bil in 2018, according to Retail Group Malaysia (RGM).
“This projection is considered optimistic by members of Malaysia retailers association (MRA). The prospect of retail industry this year is still highly dependence on the economic performance and consumer confidence level,” RGM said in its Malaysia Retail Industry Report.
It pointed out that the upcoming Malaysia general election was one of the main reasons Malaysian consumers have been taking a wait-and-see attitude on their retail spending.
“Retail sale may rise after the official election campaign started. When campaigns begin, it will lead to many political and social activities throughout the country. This should motivate consumers to spend,” RGM said,.
It added that post-election, consumers’ spending may improve further as Malaysians would focus on their own economic future and release the pent-up demand.
In the fourth quarter of 2017, sales in the Malaysian retail industry reported a modest growth of 3.1%, below forecast of a 4.5% growth.
“This latest quarterly result did not meet market expectation. Members of MRA projected the fourth quarter growth rate in November 2017 at 3.8%. It was also below RGM forecast at 4.5%,” RGM said.
For the whole of 2017, the retail sale growth rate was 2.0%, or RM 99.8bil as compared to the same period a year ago. Retail industry performance last year lagged behind GDP growth rate of 5.9%.
“After a rollercoaster ride in 2017, members of the retailers’ association are hopeful that their businesses will begin to recover in 2018. They estimate an average growth rate of 5.4% during the first quarter of 2018, due to the Chinese New Year period,” RGM said.