Retailers hope CNY spurs more spending this year

From the economical perspective, we are expecting to do better this year as the world’s economy is predicted to be better, says VP


As THE Chinese community prepares to usher in the Year of the Dog, retailers are hoping the Chinese New Year (CNY) and festive spending will bring some cheer back to the retail segment which has been depressed over the last few quarters.

The retail segment has been going through a painful period since 2016. Retail Group Malaysia had said the country’s retail sales declined by 1.1% for the July-September 2017 period compared to a year ago.

Retailers are hoping macroeconomic factors including the ringgit’s strengthening, rising crude oil prices and better than expected gross domestic product (GDP) performance will translate to higher spending.

Malaysia Retail Chain Association VP Datuk Liew Bin said retail sales are expected to rise as much as 30% during this CNY festive season.

“Sales are likely to increase, especially for the clothing and food and beverage segments, and would easily rise to 30% compared to a normal day operation.

“For small retailers, the January sales have grown by at least 20%, compared to last year’s performance.

“Retailers traditionally will leverage on the festive season spending, particularly Hari Raya Aidilfitri and CNY, compared to Christmas,” he told The Malaysian Reserve (TMR).

He said the encouraging sentiment could contribute to the confidence projected on 2018’s overall retail performance.

“From the economical perspective, we are expecting to do better this year as the world’s economy is predicted to be better.

“As our currency is strengthening against the greenback, it will translate into a more reasonable cost in imports,” he said.

Liew added that the positive sentiment is likely to be sustained by the government’s continuous spending for the upcoming 14th General Election and the upbeat tourism sector.

“The election also plays an important part in the equation as the government will likely increase the country’s spending, in addition to the rising number of expected tourists from China and Taiwan,” he said.

However, all is not rosy for the sector.

Despite the increase in footfall in Sunway Malls, sales and consumers’ spending have been growing at a slower pace, Sunway Shopping Malls and Theme Parks CEO HC Chan (picture) told TMR.

“For the last couple of weeks, there has been progress in consumers’ sentiment as we have registered a 10% increase of mall visitors.

“However, the purchase has only increased by a single digit, or 6%, from December 2017,” he said.

Chan said this could be due to the weak consumer confidence that the retail segment has been experiencing since 2016.

“This is a sign of soft market sentiment. The traffic is busy and bustling, but somehow the spending is less — that reflects the market sentiment.

However, Chan said the confidence may change if the country’s GDP growth can be sustained.

“The retail market has a strong correlation with the country’s performance.

“If the nation’s GDP is able to be kept above 5% growth for the next couple of quarters, retailers are confident that the retail market will thrive,” he said.