Retailers reopen with steep discounts

Despite the higher operating costs under coronavirus measures, retailers are not expected to increase prices, says MRCA

by AFIQ AZIZ/ pic by MUHD AMIN NAHARUL

MALAYSIAN stores are slashing prices to lure wary shoppers as the country slowly eases its coronavirus restrictions.

Stores reopened last week after the government allowed most businesses and industry to operate again after two months, but strict health procedures, as well as fear of infection, mean the pre-pandemic sales are still elusive.

Thus, many shops are offering steep discounts to generate sales.

Malaysia Retail Chain Association (MRCA) president Datuk Seri Garry Chua said only 20% of normal shoppers are back, but they are also more careful about spending because of the economic effect of the pandemic.

“We can see that people are slowly coming (back) to the malls since the government eased up the Movement Control Order (MCO). But it is too slow and it is unlikely for the retails to reach even 40% of customers for the next couple of months.

“As such, giving discounts are inevitable, just so that consumers would come and spend,” he told The Malaysian Reserve.

Businesses that reopen during the Conditional MCO have to adhere to stringent health guidelines, including sanitisation and clean-ups, as well as social-distancing measures for both staff and shoppers.

Chua said people should not be too afraid to visit malls and shops as generally, Malaysians have been observing a high level of personal hygiene for the past two months.

Chua said the association also recommends drastic measures for malls and retailers to attract shoppers.

“While the landlords are promoting and ensuring high levels of hygiene for public safety, retailers should offer greater discounts and special sales for extra attraction.

“We can see that businesses are starting to offer great discounts.”

Additionally, he said malls could consider waiving parking fees as a way to welcome shoppers back.

“We need aggressive marketing. If this goes well, the government may even allow the tourist sector to reopen within the next two months, if we see the return of demand from the retail side.”

However, other challenges remain for the high street shops. Chua said there is also less disposable income for some consumers because they could not make money during the business shutdown.

Businesses must also cope with higher expenses in maintaining social distancing, as well as other compulsory health measures, which mean long lines are inevitable.

Chua said despite the higher operating costs under coronavirus measures, retailers are not expected to increase prices.

Not all retailers will be able to absorb the increased costs of health measures though, said MRCA council member Datuk Ameer Ali Mydin.

He said retailers such as food market operators may need to revise their prices upwards in the next few months to factor in health measure costs, which can be substantial in the long run.

Ameer Ali, who is also MD of Mydin hypermarkets, said the retailer must provide 8,000 face masks for workers daily, which costs an extra RM360,000 a month.

“We also need extra security personnel to manage the social distancing, including for health screening and temperature checks.

“So, the requirement for staff is going up and it is a big cost. This is yet to include hand sanitisers as more than 150,000 people walk into a Mydin outlet every day.”

Ameer Ali said the price increases may not happen so soon as owners are still trying to open and keep their businesses afloat.

“But as business picks up slowly, eventually prices will have to go up because the cost has risen.

“We may see this happen after two to three months because the pressure on costs will increase. This social distancing is very costly,” Ameer Ali lamented.