KUALA LUMPUR (June 26): The Malaysian Retail Chain Association (MRCA) is keeping its target for the country’s overall retail sales growth this year at 4.5%. 

MRCA president Datuk Seri Garry Chua is optimistic about the industry, as consumers take advantage of the zero-rated Goods and Services Tax (GST) period, before the Sales and Services Tax (SST) kicks in in September. 

“We expect retail sales to be much better than last year, when growth was about 2%, as shoppers were still careful in their spending. In 2016, growth was less than 4%. This year, we expect improved consumer sentiments with the repeal of GST," Chua told a press conference today.

“Hopefully, with the reintroduction of the SST, it will be more conducive as well,” he said.

The association also sees a 30% growth in franchise retail by 2020, driven by higher joint ventures (JV) with foreign retail chains.

For now, the number of franchise groups make up about 10% of the retail sector, which is ‘still small’, Chua added.

He hopes the government will consider providing tax incentives and subsidies to encourage foreign participation, while assisting local players to participate in JVs that will increase the number of franchises here.

On June 6, Retail Group Malaysia had revised upwards its projected 2018 retail sales growth rate for Malaysia to 5.3%, from 4.7%. — theedgemarkets.com

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