MCO 2.0 wipes out 90% of retail businesses

The tremendous increase in Covid-19 cases has affected consumers’ confidence despite strict SOPs in place


MALAYSIA’S second round of the Movement Control Order (MCO) has dimmed any hope of recovery for the local retail scene.

Bumiputera Retailers Organisation president Datuk Wira Ameer Ali Mydin said retail businesses have dropped about 90% during the first week of MCO 2.0 compared to before it came into force on Jan 13.

“Although shopping complexes are allowed to open, the retail sector is taking a drastic hit. People are not coming out to shop despite strict standard operating procedures (SOPs) in place.

“Also, the number of Covid-19 cases which has been increasing tremendously day by day has affected consumers’ confidence,” he told The Malaysian Reserve (TMR).

Ameer Ali, who is also the MD of Mydin Mohamed Holdings Bhd, said the drop in sales is also attributed to the suspension of the apparel segment.

He added that in general, 70% of tenants at shopping complexes are usually made up of the apparel segment, while the remaining 30% are taken up by the food segment.

In comparison, Ameer Ali said the current MCO’s impact on the retail sector has exceeded that of last year’s MCO.

“Business dropped by 90% within the first week of MCO 2.0, partly because the apparel segment was ordered to be closed.

“The initial MCO in March 2020 did not go down as bad as this one,” he said.

He added that during the Conditional MCO (CMCO) period, retail business recovered and rebounded by 50% to 60%.

On Jan 13, TMR reported that an industry expert predicted the growth rate in retail sales for 2021 will stand at 4.9% and has a risk to drop further due to the current development.

Retail Group Malaysia (RGM) MD Tan Hai Hsin told TMR that the new wave of the pandemic in Malaysia and the country’s stance in border policy are posing threats to the industry’s recovery.

For the fourth quarter of 2020, Tan said RGM estimated retail sales to drop by 18.2% based on the situation during the new wave of the pandemic, as well as the CMCO.

“Majority of retailers were also unable to operate at full capacity or at pre-Covid-19 level due to limited shoppers and shorter operational hours, among others.

“When the MCO was reimplemented, the general public started to avoid crowded and enclosed places.

“This fear has caused a significant drop in shopping traffic as much as 60% at most of the shopping and commercial centres,” he told TMR previously.