Retail industry grew 3.1% in 4Q2017, below expectation

KUALA LUMPUR (March 14): The Malaysia retail industry reported a modest growth rate of 3.1% in the fourth quarter of 2017, below market expectation.

The Malaysia Retailers Association (MRA) members had projected the fourth quarter growth rate in November 2017 at 3.8% and it was also below Retail Group Malaysia (RGM) forecast at 4.5%.

"The Malaysia Retail Industry Report" for March 2018, compiled by RGM said this latest quarterly result is consistent with Consumer Sentiment Index during the same period published by Malaysian Institute of Economic Research.

It said rising cost of living continued to deteriorate the purchasing power of Malaysian consumers.

RGM said that for the whole of 2017, the retail sale growth rate was 2.0% (or RM 99.8 billion), as compared with the same period a year ago.

“Retail industry performance last year lagged behind gross domestic product (GDP) growth rate of 5.9%,” it said.

Moving forward, RGM said that based on its first quarterly projections of retail sales for 2018, it estimates 4.7% growth rate in retail sale this year (or RM 104.4 billion).

“At this moment, this projection is considered optimistic by MRA members.

“The prospect of retail industry this year is still highly dependence on the economic performance and consumer confidence level,” the report added.

RGM said the upcoming Malaysia general election is 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.  

“Post-election, consumers' spending may improve further as Malaysians will focus on their own economic future and release the pent-up demand,” the report said. — theedgemarkets.com

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