Specialty retail to grow 6.6% in 1Q18

PETALING JAYA (March 24): Specialty retail stores – which include sporting goods and F & B – are expected to grow by 6.6% in January to March, according to Retail Group Malaysia Sdn Bhd (RGM).

The Edge weekly reported that RGM’s data – which is derived from the performance of the members of the Malaysia Retailers Association (MRA) – also showed that the specialty retail subsector outpaced other subsectors, rising by 5.6% last year.

The subsector’s performance has prompted malls to allocate more space for these businesses; for instance, Sunway Malls which owns and operates five malls with a total net lettable area (NLA) of 4.7 million sq ft is starting to allocate more space for these retailers.

Brands such as JD Sports, Innisfree and Etude House continue to expand due to their appeal in a bricks-and-mortar setting amid challenges posed by weak consumer sentiment and the growth of online shopping, said Sunway Malls & Theme Park CEO H C Chan.

Likewise, foreign and local retailers are continuing their expansion in the local market, with 63 foreign brands entering Malaysia last year despite the dampened retail environment.

“Malaysia continues to attract many foreign retailers, some who are entering the market for the first time… they include HLA, Dome Sky, Chizu, Chicken Up, Koi, Wingstop, Paul, Kiss the Tiramisu, and Sergent Major,” said RGM managing director Tan Hai Hsin.

In 1Q18 alone, 10 foreign brands from eight countries set up shop here, including Off-White, Cold Stone, Nene Chicken, Forty Hands Café, Sunny Queen and Tai Croissant, he added.

Meanwhile, the retail sector may be able to tap into tourist dollars to shore up its performance, as tourists spent a record RM25.87 billion on shopping alone last year – representing 32.7% of RM82.2 billion of foreign exchange receipts.

This also represents a quarter of all retail spending, based on RGM’s tabulation of RM99.8 billion spent last year.

Total spending may reach RM50 billion in a few years, based foreign tourist receipts targeted to hit RM168 billion by 2020.