Aeon Malaysia experiencing inflationary pressure


INFLATIONARY pressures and the higher minimum wage level are adding pressure on the retail industry.

Aeon Co (M) Bhd MD Shafie Shamsuddin (picture) said some of Aeon Malaysia’s product prices have increased between 3% to 5% due to inflation.

“We have been able to delay the price increases to about three to six months in order for us to give space to our consumers to adapt to the current condition,” Shafie said in a virtual press conference after Aeon Malaysia 37th AGM today.

He added the retail industry has been under pressure since the outbreak of the Covid-19 pandemic and Aeon Malaysia has to stay agile to face the challenging situation.

On the issue of the higher minimum wage, Shafie stated about 30% to 40% of Aeon Malaysia’s employees were given a salary increment.

“About 3,700 employees of Aeon Malaysia have been given this increment from RM1,200 to RM1,500 as of January 2022,” he said.

Aeon Malaysia will find ways and innovations to reduce its cost of goods sold and its business operating costs. 

He added the retail group has been able to leverage its ecosystem and collaborate with its partners and vendors which enable it to offer essential products at a very competitive price.

Aeon Malaysia also plans to launch its “Anti-inflation Campaign” for essential products soon.

“It is very difficult for us to guarantee that prices will not go up because we are facing challenges that are beyond our control.

“But our commitment in Aeon is to continuously be innovative in the way we do things,” he added.

Shafie said Aeon Malaysia has been very prudent and continues to focus on “sweating” its current assets.

“We have invested RM40 million this year in our renovation of the Aeon Alpha Angle mall in Wangsa Maju, Kuala Lumpur. We plan to open a new general merchandise departmental store, likely in the last quarter of 2022 with an investment of about RM30 million-RM40 million,” he added.

Moreover, Aeon Malaysia will also be spending about 20% of its capital expenditure on its digitalisation business this year.