RGM: Most retailers maintain prices

by FARA AISYAH / pic by MUHD AMIN NAHARUL

MANY retailers continue to sell products at pre-Sales and Services Tax (SST) prices as sellers hope consumer spending will rise and prevent a similar decline faced during the unpopular Goods and Services Tax (GST) period.

Retail Group Malaysia (RGM) MD Tan Hai Hsin (picture) said such a move was something unexpected as most of the retailers would only announce their plans after Aug 31, which was the last day of the three-month tax holiday period.

“We noticed that most of the retailers choose to maintain their prices for the time being. Some have decided to maintain their selling prices for at least a month. There are a few reasons for this surprise action.

“Firstly, retailers are still in possession of stocks purchased during the tax holiday and secondly, they are afraid that their sales will drop drastically in the first month of SST. As such, they choose to absorb the price difference,” he told The Malaysian Reserve.

Tan added that some retailers have not been informed by their suppliers on the price increase, while others are able to maintain their prices as the increases from the supply side are minimal at this moment.

He also acknowledged that some of the players — especially those in food and beverage, as well as services segments — with turnovers above the thresholds stated by the Royal Malaysian Customs Department, chose to increase their prices.

In the meantime, Tan said the retail market is expected to drop significantly during the first two months of the SST implementation, and will recover in November in conjunction with the school holiday and festive season.

“However, we still need to observe in the next few weeks, especially in the month of October,” he added.

Tan also said many consumers had rushed to buy more goods during the last week of August in order to save money.

“We do not have the specific percentage of the sales increase at this moment. It varies among traders and retailers,” he said.

Tan said some of the items — including groceries, electronic goods and gadgets, electrical appliances, furniture and home furnishings — have increased by 10%, 30% and even up to 50%.

However, the price increase for grocery items did not take place in most supermarkets and mini markets, he added.

Meanwhile, Tan said consumers are still confused over SST as the government did not undertake enough efforts to educate members of the public about the tax.

“They are still confused between SST and GST. There were not enough advertisements — both offline and online — on SST except for several announcements made by the finance minister.

“At the same time, only few consumer product manufacturers and retailers made public announcements on their prices after Aug 31, 2018,” Tan concluded.