Economy grew 5.9% last year, the ringgit has strengthened and crude oil prices are at multi-year highs
By SHAHEERA AZNAM SHAH & FARA AISYAH / Pic By AFIF ABD HALIM
A STRONGER ringgit, better than expected economic numbers and higher crude oil price have not trickled down to better retail sales with the fashion and clothing segment having been worst hit, said Malaysia Retail Chain Association VP Datuk Liew Bin (picture).
Retailers are hoping the strong economic statistics, with the ringgit erasing much of last year’s dismay, would jump-start the retail sector, which has been reeling over the last few years.
Liew said retailers have yet to reap from the country’s good performance recorded in the past several months.
“The sentiment is not actually what we hoped it to be as many of the retailers are not doing well.
“In fact, there are retailers who had a drop in their Chinese New Year (CNY) sales. To my knowledge, the decline can go as high as 50% compared to the previous year,” he told The Malaysian Reserve.
Malaysia’s economy grew 5.9% last year, the local currency has strengthened to around RM3.90 against the US dollar from a 52-week low of RM4.46 and crude oil prices are at multi-year highs after the drubbing in 2014.
However, inflation spiked to 3.7% last year, largely due to higher fuel prices and costs of food and non-alcoholic beverages.
Retail sales contracted 1.1% in the July-September 2017 period compared to the same period in 2016, according a report by Retail Group Malaysia.
Liew, who heads a local wholesale bag manufacturer, Bagman Corp Sdn Bhd, said retailers in the fashion-driven segment would likely have suffered more compared to those in other niche sectors.
“As a retailer myself, I think the sentiment this time around is not encouraging compared to previous years, particularly in the clothing sector.
“Retailers in the food and beverage sector are likely to survive the current harsh retail environment as food is a necessity,” he said.
Liew said despite the lukewarm returns for the CNY sales, it does not determine the entire year’s retail performance as the economy has been improving.
“We hope that it will slowly pick up and recover, given that we have another festive celebration upon us,” he said.
Liew had previously mentioned that the retail sales could go up as much as 30% during the CNY festive season as the industry was showing signs of a slight recovery since January.
Christy Ng, the founder of Christy Ng Shoes, said she managed to increase her sales by 15% during the recent CNY, partly due to the omni-channel concept she adopted for her business model.
“We have an e-commerce segment on top of our physical retail store, and that has allowed us to reach more customers.
“Our store in MyTown (shopping centre) catches the customers around the Kuala Lumpur area while our online platform reaches out to the whole country,” she said.
Ng said she noticed a change in consumers’ spending behaviour where they prefer to shop earlier rather than leave it to the last minute.
“I believe that because customers are more conscious about the products and tend to research and compare prices before making any purchases, they tend to do their shopping weeks or even months earlier than usual” he said.