Rahman Dahlan: Hypermarket sales not the sole marker of economic health

PETALING JAYA: Hypermarket sales are not the only benchmark of retail sales performance or the economic condition of Malaysia and the people, says Datuk Seri Abdul Rahman Dahlan.

In a statement on Wednesday, the Minister in the Prime Minister's Department refuted claims that Malaysians do not have money to spend despite the country's strong economic growth, evidenced by a continued contraction of hypermarket sales.

He said hypermarket sales only amount to only 8% of total retail sales, based on data provided by the Department of Statistics Malaysia (DOSM).

Abdul Rahman said that the economic performance and condition of a country and its people could not be measured by the hypermarket industry alone.

"Even so, retail trade in Malaysia has been recording a strong growth both in terms of value and volume. In terms of value, retail trade registered double-digit growth for three consecutive quarters in 2017," he added.

Retail trade in the first 11 months of 2017 increased to RM410.5bil from RM367.7bil in the same period for 2016, a growth of 11.6%.

He said that given the increase of non-specialised stores, some hypermarkets may also face slowing sales as consumers have more shopping choices.

"Based on Economic Census 2016 published by DOSM, e-commerce transactions of business-to-consumer (B2C) is valued at RM73.7bil and expanding every year.

"Some hypermarkets in Malaysia have already started to offer online grocery shopping and delivery to their customers. Those which have not ventured into the 'trend' yet will lose out on the potential gains that come from the thriving online shopping scene," said Abdul Rahman.

He also referred to other figures that indicate that Malaysians in general have more money to spend.

"For example, domestic tourists' expenditure grew by 10.2% in 2016 to register RM74.8bil compared to RM67.7bil in 2015.

"Malaysian tourists spent RM33.5bil abroad in 2016, an increase from RM31.1bil in 2015 despite the depreciating Ringgit during the said period," he added.

According to Abdul Rahman, all these figures are in tandem with rising median monthly household income of 6.2% per annum from RM4,585 in 2014 to RM5,228 in 2016 and soaring average monthly household expenditure of 5.9% per annum from RM3,578 in 2014 to RM4,033 in 2016, as reported in the Household Income and Expenditure Surveys by the DOSM.

"Malaysia's strong economic growth has clearly benefited the people in term of rising income and purchasing power which in turn boost private consumption," he added.

Private consumption continued to be the biggest contributor to Malaysia's economy with its share of contribution to the national GDP (gross domestic product) amounting to 53.2% or RM589.7bil.

"While the GDP has its own limitations and may not be the perfect indicator of welfare and well-being of the people, it does seem to correlate pretty well with broader qualitative measures of prosperity. As GDP grows, more jobs are created, household income increases and people have more money to spend," he concluded.