Hope for CNY to usher in hot sales

Purchasing power at work: People making final purchases before the CNY festival next week at Mid Valley Megamall in Kuala Lumpur. — SHAARI CHEMAT/ The Star

PETALING JAYA: Malaysian retailers are anticipating robust sales as Chinese New Year approaches, though this year’s takings are not expected to surpass that of 2019, says the Malaysia Retailers Association (MRA).

He also urged retailers to capitalise on sales during the period from December to April, including the upcoming Raya celebrations in April.

“While retailers are performing well, there is a noticeable decline in local consumer purchasing power,” said MRA president Datuk Andrew Lim, who attributed the decline to rising prices all the way to a weak currency.

“Our purchasing power has been significantly reduced due to the rising cost of living. Electricity, oil, and gas prices have increased, affecting everyone. Moreover, the devaluation of the ringgit has made imported goods more expensive,” he said.

In March 2020, Malaysia implemented its movement control order to fight the Covid-19 pandemic, severely impacting numerous retailers’ businesses.

However, with the reopening of borders on April 1, 2022, businesses began their journey towards recovery.

Lim said the impact of reduced purchasing power is most pronounced among the B40 and M40 groups.

“Those with higher incomes will still have the means to meet their needs and desires without financial constraints.

“However, the B40 group is experiencing substantial constraints, and we are witnessing a growing number of individuals transitioning from the M40 group to the B40 group due to inflationary pressures,” he said when contacted.

Lim said this shift affects consumer behaviour, stating that when faced with lower purchasing power, individuals naturally adjust their spending habits.

“For instance, retirees who were once part of the M40 group now find themselves shopping like the B40 group due to the decreased value of their pensions.”

Lim then discussed the upcoming retail landscape, particularly concerning the Chinese New Year, Ramadan, and Hari Raya festivities.

He said that retailers have been preparing for these events for the past three to six months, ensuring that they have sufficient stock to meet the anticipated demand.

“The big retail players always plan, typically six months in advance. To secure goods, orders need to be placed well in advance, as delays could result in missed opportunities,” he said.

Asked about the potential for significant sales during the festival period and the following months, Lim said that there are already numerous sales, promotions, and warehouse clearances across the country.

“If we fail to capitalise on sales during the period from December to April, including the upcoming Raya celebrations in April, the opportunity may be lost, and we could see reduced consumer spending for the remainder of the year,” he said.

Lim urged retailers to seize the upcoming months to drive sales and attract customers.

“This period, from the Chinese New Year to Raya, is crucial for retailers. It sets the tone for the rest of the year.

“By offering competitive prices, attractive promotions, and a wide range of products, retailers can entice consumers and boost sales during this festive season,” he added.

With the government implementing a one-month visa-free policy for Chinese and Indian tourists, there is some hope for a boost in sales arising from the potential influx of Chinese tourists during the May holiday period, which includes the week-long observance of Labour Day.

“Chinese tourists have been a significant source of revenue for retailers in the past. Retailers have been preparing for this influx of tourists for the past three months, ensuring they have the right products and services,” he said

Malaysian Textile Manuacturers Association (MTMA) chairman Datuk Seri Tan Thian Poh hopes for improvement in sales leading up to Chinese New Year. Noting a slowdown in sales last month, he attributed this decline to weakened local purchasing power.

“With Hari Raya approaching in April, our members are preparing for another wave of sales.”