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CMCO and retail: Loss of sales 'could be as much as RM3.4b', says RGM

KUALA LUMPUR (Oct 17): The latest two-week Conditional Movement Control Order (CMCO) could cause retailers to lose “a whopping” RM3.4 billion in sales, Retail Group Malaysia (RGM) managing director Tan Hai Hsin (pictured) told The Edge Malaysia in a recent report.

The figures are “expected to be far worse should the CMCO be extended and if we include Sabah” which has also been placed under a two-week CMCO, he added.

“Due to the various restrictions during this CMCO 2.0 period [such as no children outside, shorter operating hours, entertainment and recreational outlets to be closed and dine-ins not encouraged], we can expect the business of these non-essential retailers to decline by at least 50%. Thus, the loss of retail sales could be as much as RM3.4 billion,” Tan explained to the weekly.

“In the event non-essential retailers are not allowed to operate during this CMCO 2.0 period, the loss of retail sales would be even higher at RM6.8 billion,” he added.

The business publication stated that RGM “is keeping its retail growth forecast for the year at a contraction of 9.3%, representing RM97.5 billion in value, for now”.

But owing to the latest round of CMCO, “it is likely that retail sales contraction will now be in the double digits”, said Tan

“The fear is that the next lockdown may be in Penang and Johor. Both states are important contributors to retail sales,” Tan furthered.

Meanwhile, although the authorities have allowed “most businesses” to operate as usual, “factors such as no interstate travel and not more than two persons in a car will have an impact on retailers”, he added.

The fall in tourist numbers are also impacting retailers. “Take Sabah, which depends on tourism to drive its economy. With no foreign tourist arrivals since March, the retail market there has been badly affected. Tourists will also stop travelling to Sarawak as the state requires a 14-day quarantine upon arrival,” Tan said.

“Based on the current economic and market environment, closures should peak in January 2021. This second CMCO in several states of Malaysia may speed up the closures,” he predicts.

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Read the full report in this week’s The Edge Malaysia

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