Retailers warn of ‘devastating decline’

Without a doubt, the whole retail industry would go into a further slump due to MCO 3.0 and HIDE, says MRCA’s Tay


THE retail industry could witness a devastating decline amid reimplementation of the Movement Control Order (MCO), Malaysia Retail Chain Association (MRCA) president Shirley Tay said.

She told The Malaysian Reserve (TMR) retailers were already struggling to recover losses before the added economic shock brought on by MCO 3.0.

“Without a doubt, the whole retail industry would go into a further slump. Retailers are working hard to recover from huge losses suffered. Another MCO will cause unimaginable damage to the performance of the retail industry.”

Tay revealed that although there were slight improvements, businesses have not fully rebounded despite the relaxation of the standard operating procedures (SOPs).

“Though there was a marginal improvement compared to the period with stricter phases of MCOs last year and in the first quarter of 2021 (1Q21), we were way below in recovery from our performance prior to the pandemic.

Senior Minister (Security Cluster) Datuk Seri Ismail Sabri Yaakob announced last week that MCO is enforced in six districts in Selangor and entire of Kuala Lumpur.

Retailers now face dark days ahead, compounded by the government’s Hotspot Identification for Dynamic Engagement (HIDE) list which revealed malls and grocers among potential hotspots for Covid-19 transmission.

Following the revelation on Saturday, Ismail Sabri had ordered the listed premises — estimated about 152 of them — to be shut for three days.

This prompted MRCA, Malaysia Shopping Malls Association and Malaysia Retailers Association to demand for the Ministry of Science, Technology and Innovation (Mosti) to immediately suspend announcing any more information derived from HIDE until clear, accurate and precise basis accompanies the information to be released.

“It is obvious the HIDE information is incomplete and skewed, and portrays a completely different picture than the real situation,” the retail associations said in a joint statement.

“The information is incomplete as only those premises and operations that diligently comply with the SOPs and MySejahtera recording are data-mined. Those sectors that do not comply and blatantly flout the SOPs are not evaluated for lack of data and thus do not appear as a hotspot, despite being so,” the statement added.

TMR reported earlier in April that the majority of mall retailers have seen footfall returning to pre-Covid levels since MCO 2.0 was lifted.

Retail Group Malaysia MD Tan Hai Hsin told TMR while retail and food and beverage (F&B) sales are still below 2019 levels, he expects a more positive 2Q21 outlook.

“We estimate a growth rate of 7% as all types of retail shops have reopened with social-distancing measures. This will bring more sales during this festive season compared to last year.

“Despite many closures, there have been many openings on a weekly basis throughout the country. These include popular types of trades like F&B outlets in shops, offices, convenience stores, mini markets, as well as service-oriented retail trades like clinics, dental clinics and chiropractors.”

“For the first two months of 2021, we witnessed a relatively high number of closures. The implementation of MCO 2.0 led to some retailers giving up their businesses.”

He said since MCO 1.0 in 2020, about 5% of shopping centre tenants and 10% of ground floor shop office tenants had closed down.

Institute for Democracy and Economic Affairs CEO Tricia Yeoh believes HIDE is a good use of data, but it is the first time that many, including industry and retail representatives, have heard of the system.

“It would be good to have more comprehensive information about how the system is being deployed vis-a-vis the MCO more generally.

“Are the two ministries — Mosti and Ministry of Health making joint decisions over how strictly the MCO regulations are being enforced?”

She told TMR the main point is that any decisions from now on need to be done ahead of time to give sufficient notice to business operators to plan and coordinate their resources.

“I think people need to know on what basis the HIDE system works. Meaning that, in the future, on what basis will HIDE make a decision once again to close the potential hotspots and for how many number of days, and whether there will be advance notification for both the retailers and consumers?

“If the basis is provided, I believe this will create greater public trust,” she added.

Malaysian Medical Association president Prof Datuk Dr Subramaniam Muniandy said the public should assume that Covid-19 is everywhere and not just specific places identified by HIDE.

He said HIDE should be more extensively used to identify hotspot areas to be screened for Covid-19, as community transmissions are now high.

“Those testing positive should be immediately isolated and close contacts quickly traced for screening.

“The government should also consider vaccinations en masse to interrupt transmissions in hotspots.”