Retailers plead for survival

Govt urged to consider lifting its Covid ban on malls and non-essential retailers in upcoming review of MCO 3.0


MALAYSIA retailers said half of their numbers who have survived Covid-19 restrictions so far will close permanently if they are not allowed to open by next month.

Five national retailer groups are pleading directly to the prime minister (PM) in an open letter yesterday.

In their appeal, the retailers said if the shops are closed for much longer, there would be irreparable damage that will delay recovery for several more years.

The retailers want the government to consider lifting its Covid ban on malls and non-essential retailers in the following review of the Movement Control Order (MCO) 3.0.

“We appeal to the government to take all the positive factors into account in the upcoming review and allow an immediate reopening of all trades in the malls, except for those in the negative lists.

“We seek the government’s urgent consideration to mitigate the catastrophic and real scenario as predicted above,” the retail groups said in a statement.

The open letter represents the Malaysia Shopping Mall Association, Malaysia Retailers Association, Malaysia Retail Chain Association (MRCA), Bumiputera Retailers Organisation and the Selangor and KL (Kuala Lumpur) Electrical Home Appliances Dealers’ Association.

The retail groups believed that another 50% of the businesses that remain open presently are expected to shut their doors as they are unable to financially survive the third round of the movement restriction.

Currently, about 20% to 30% of shops in malls have been closed due to the adverse conditions in the past 16 months, while 30% of staff had been laid off, amounting to 300,000 personnel, the groups said.

“We foresee that in the event of malls and retail industry as a whole, including street-front shops, are not reopened by the beginning of July 2021, there will be another 50% of the remaining shops closing their doors for good, including prominent domestic and international retail brands with more employees at risk of being laid off,” the statement said.

The groups said once the international brands make their way out of Malaysia, it will be more difficult to lure them back into the country.

“With these massive lay-offs and shop closures, the retail and shopping malls industries will be grievously and critically damaged.

“They will need massive efforts and time to rebuild malls’ ecosystems or the malls themselves will permanently close, and the retail supply chain will be deeply fractured.”

Citing data from the Ministry of Health (MoH), the retail groups said the infectivity rate at malls has shown improvement due to the strict adherence to the standard operating procedures (SOPs), which the government should consider in its evaluation of the MCO.

“The MoH data reveals that the retail and shopping sector contributed merely 0.8% of all cases in May 2021, even prior to the full MCO lockdown which started on June 1, 2021.

“These significantly-improved and extremely low figures testify to the retail and mall industries’ strict adherence to the SOPs and should not be unduly penalised with closure from operating.”

According to Malaysia’s National Recovery Plan announced last week, the full-scale movement restriction is expected to end on June 28, with the condition that daily positive cases are below 4,000.

The Malaysian Reserve (TMR) previously reported that at least another 51,000 retail stores are expected to cease operation as Malaysia has yet to take the edge off the pandemic.

Retail Group Malaysia MD Tan Hai Hsin told TMR back in March that the number of outlets facing closure represents some 15% of the total retail stores nationwide.

The government recently announced the NRP, but sectors like retailers feel it won’t help them much.

MRCA council member and Arori (M) Sdn Bhd ED Raymond Woo said recovery for the retail sector is heavily dependent on when business reopens.

“Vaccination needs to be sped up to achieve herd immunity and quick decisive action from the government on automated moratorium for all is imperative,” he told TMR.

Since the pandemic, retailers have been moving their business online to cope, though some difficulties were faced due to limitations that were only addressed during the pandemic.

Woo said not all retailers were approved to open during the current Full MCO and even those who are in the approved categories have had difficulties getting the Ministry of International Trade and Industry’s permits, despite having online businesses.

“This issue is prevalent up until today and although they are not selling on an online platform per se, they are also the supplier of products to online platforms.

“This also includes some other retailers who did not adopt the digital or omnichannel move initially, but now are seeing higher priority to go digital.”

He said as online business are getting more relevant, some retailers are seeing tighter cashflows to further develop their online footprints.

“Therefore this automatic moratorium needs to be given.

“Despite the push from retailers, the government and Finance Ministry are reluctant to give, as the moratorium currently is not automatic and all of us will need to apply and its approval is dependent on a case-by-case basis.”

Woo said automatic moratorium should be given to all and be on an opt-out basis, while landlords could also stand to be more flexible with rentals during these trying times.

“I could also suggest for them to chip in and ease businesses’ burden with some wage trimming.

“At the end of the day, this is to enable business to tide through this lockdown with low or no business.”

Malaysian Association of Hotel Owners ED Shaharuddin M Saaid said the NRP announced was thin with little help for hotel operators.

“Based on the NRP itself, what additional assistance or support can the government give to businesses so that they can be sustained or survive until December?

“The vaccination progress should be accelerated so that 60% herd immunity can be achieved by August, so that businesses and tourism can be reopened.”