Cheery site: Qi Ning (centre), 26, with her mother Ivy Chiew, 65, and her partner Benjamin Ong, 26, looking at Christmas and Chinese New Year decorations at a shop in Kuala Lumpur. — IZZRAFIQ ALIAS/The Star
KUALA LUMPUR: It’s that time of year again! The Malaysian retail sector is in full swing, demonstrating steady strength and careful planning as stores fill up for the festive season, recording encouraging sales while managing their busiest time of year.
Malaysia Retail Chain Association president Datuk Ken Phua said sentiment has improved on the back of recent trade developments.
“Retail sales have been encouraging ever since the government signed a trade deal with the United States, which provides some certainty in the economic prospects,” he said.
However, he stressed that the expanded 8% service tax on rentals has hit retailers hard.
“What impacted retailers the most in 2025 is the implementation of 8% SST on rental, as it affects every retailer,” he said, adding that SST on rental and renovation has significantly pushed up tenants’ costs.
“In short, this year retailers are most impacted by the 8% SST on rental services than ringgit appreciation, because SST impacts everyone, including consumers,” he said.
Looking ahead to Visit Malaysia 2026, he said malls are preparing for a tourism boost, with 47 million tourist arrivals and RM329bil in receipts targeted.
“Despite the target tourist spending, we have yet to determine whether shopping will be the ultimate beneficiary, as retailers and mall operators are facing cost pressure and passing it on to end consumers.
“If we wish to remain competitive as a shopping paradise destination, we ought to be competitive in our price offering to make Malaysia a shopping paradise in Asia,” he added.
Malaysia Retailers Association president Datuk Andrew Lim Tatt Keong said the industry is “well into the triple peak sales period which began from November to Christmas to the school holidays and the new year”.
This critical time, which covers the crucial festive gifting season, “is expected to continue into January 2026 and the Chinese New Year”, he said.
Lim said preparations were done six months ago as their brand partners had placed orders from overseas for the merchandise and the production of materials.
“But retail sales are about 10% down compared to 2019. This is because of the world and local economic factors.
“These (US) tariff and trade wars are certainly not helping, making people concerned about the future. I think Malaysians are back on the spending spree but there is still concern about what’s happening globally and regionally,” said Lim, who is also group deputy chairman of Sogo Department Store in Kuala Lumpur.
In terms of consumer purchase, he said luxury goods are not selling as much compared to 2019 but the middle market baseline is doing well with around 10% above last year.
Asked about the footfall to Sogo KL, he said there is a lot but the spending power is muted due to inflation.
“So, we have the same footfall but they are unable to buy as many things as before. For example, previously a T-shirt would have cost RM20, so you can buy two but now it costs RM30, so you buy one,” he said.
Sunway Malls chief executive officer HC Chan noted that October through December has always been a stronghold for the retail sector as major festivities begin and year-end holidays take place.
He said the period is expected to drive up festive shopping, a key component of retail spending.
“With the festive season, we forecast it will be a strong 1Q for Sunway Malls as we head towards 2026,“ he said.
