KUALA LUMPUR (Dec 26): The retail industry is expected to turn around next year, growing at a forecast 4.9%, The Edge Malaysia in its latest issue reported Retail Group Malaysia (RGM) announcing.
RGM stated that “all retail sub-sectors — fashion, department stores or grocery” are expected to rebound, “which would bring RM95 billion in total retail sales”.
However, RGM managing director Tan Hai Hsin is also a bit cautious, saying that with the Klang Valley being such a “critical retail market, accounting for 60% of the country’s retail sales, any restriction on inter-district and inter-state travel may derail the recovery”.
RGM data includes fashion, optical, hardware, and food and beverage (F&B) retailers while “big-ticket” items such as cars and houses, and service providers like cinemas and hair salons, are left out.
Retail purchases “via mobile phones or computers are included only if the shopping site is operated by a brick-and-mortar store”.
Tan also explained to the weekly that the local retail market is “somewhat unpredictable”, saying that any development such as “a fourth wave of Covid-19, another MCO, the collapse of the world economy, a change in the ruling political party, a general election or a new cluster in a major shopping mall” can be a major influence.
Tan added that he “does not expect any pent-up demand” since many people have already resumed buying at physical retail stores since the first CMCO on May 4.
Meanwhile, Savills Malaysia associate director Murli Menon does expect to see pent-up demand in 2021 “be it for travel, dining or retail”.
“At the end of the day, retail offers that social experience that online cannot and hence, there is bound to be recovery and some amount of revenge shopping and dining. We already saw bursts of that each time restrictions were loosened,” Murli told The Edge.
PPK president Tan Sri Teo Chiang Kok also expects to see pent-up demand. “Once the situation improves, shoppers will return to malls, especially as they have become places to socialise,” he said.
But without a doubt, retail was badly impacted by Covid-19 in 2020. RGM’s Tan said about “51,000 stores, or 15% of the country’s total retail supply, are expected to cease operations between March 18, when the Movement Control Order (MCO) was imposed, and January 2021”.
Closures are expected to “accelerate from October and peak in January 2021, following the end of the six-month banking loan moratorium on Sept 30”.
PPK’s Teo said that “the pandemic came without warning and caused a catastrophe like no other for shopping malls and the entire economy”.
Read the full report in this week’s The Edge Malaysia
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