Malaysia’s retail growth slashes to 2.7% in 2023

KUALA LUMPUR: Retail Group Malaysia (RGM) has revised downwards Malaysia’s annual retail industry growth rate for 2023 to 2.7% from 4.8%.

“The second quarter growth rate was -4.0% instead of 2.6% estimated three months ago. This unexpected final result was a downward revision by 254%.

“The third quarter growth rate was estimated at 3.0% in June 2023. Retailers are less optimistic on the spending power of Malaysian consumers during the current quarter. The third quarter growth rate has been revised downwards from 3.0% to 1.4%. This is a 53% drop from earlier projections,” RGM said in a statement.

For the last quarter of 2023, the growth projection maintains at 3.0% as compared to a year ago.

RGM said although shopping traffic has returned to pre-covid level, the spending power has been weakened in recent months. Malaysia retail industry is still facing several major challenges for the rest of this year.

It noted that while the monthly inflation rate has eased during the last few months, the price increments of many basic necessities and consumer goods are still higher than pre-lockdown.

“Weak Malaysian currency in recent months has led to another round of price increases due to higher import costs of raw materials, semi-finished goods and finished retail goods,” RGM said.

During the second quarter, retail sales of department store cum supermarket sub-sector dropped by 9.6%, as compared to the same period a year ago.

In addition, the retail business of the department store sub-sector shrunk by 16.7% during the second 3-month period of this year. This was the worst performing sub-sector during the quarter.

“In spite of Hari Raya festival, the sales of the supermarket and hypermarket sub-sector fell by 6.1% during the second quarter

of 2023.

“On the other hand, the mini-market, convenience store & cooperative enjoyed a double-digit growth rate of 11.5% in retail sales during the second quarter of this year. This was the best performing sub-sector during the quarter,” RGM said.