Malaysia retail sales likely to grow 6.5pc this year

The Malaysia Retailers Association also anticipates the industry to grow 6.0 per cent next year.



Kuala Lumpur: Malaysia’s retail industry is expected to grow 6.5 per cent this year, from last year’s 8.4 per cent growth.

The Malaysia Retailers Association (MRA), in its latest report, also anticipates the industry to grow 6.0 per cent next year.

For
the fourth quarter this year, retailers in the country expect their
sales to increase by 10.4 per cent, with specialty retail stores
anticipated to record biggest sales growth at 15.9 per cent.

This
is followed by fashion and fashion accessories at 14.9 per cent,
department store-cumsupermarkets at 9.4 per cent and department stores
at modest 3.7 per cent.

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The specialty stores include retailers selling photographic equipment
with photo processing services, optical products, sportswear and
sporting equipment, fitness equipment, golf
equipment, toys, souvenirs as well as touristrelated
products.

Despite
the optimism of these retailers, who are MRA members, the association
itself estimates the retail sales to grow 5 per cent in the last quarter
this year.

It said in the third quarter, the retail industry
recorded a slower growth rate of 7.0 per cent in sales compared with 9.8
per cent expansion in the same period in 2010.

“Based on the latest retail results, Retail Group Malaysia
still
maintains its retail industry growth rate at 6.5 per cent for the whole
of 2011,” the MRA said in its December 2011 report.

The MRA said
in the first nine months of this year, the industry registered a growth
rate of 6.8 per cent. Similar to the first half of this year, retailers
still had to absorb the rising cost of goods and offer very attractive
bargains to attract shoppers,
it said.

While Bank Negara
Malaysia is projecting an economic growth rate of between 5 and 6 per
cent next year, MRA is anticipating the retail industry to moderate to 6
per cent.

The MRA said the unresolved eurozone debt crisis, the
potential US double-dip recession and the recent decline in China export
market will affect the country’s economy in 2012.

“When the
export-oriented manufacturing sector slows down due to low external
demand, it will affect local employment market. Some
Malaysians may be out of jobs next year, many will not get salary increments and graduates will not be able to find jobs.

All
these will affect retail spending,” it said. Concerns about job
prospects may make consumers keep a tight hold on their purse strings
and only spend during sales or value-for-money
promotions.

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