Retail industry upbeat as some biz return to pre-pandemic level

Shopping traffic has returned to the pre-Covid level, despite the number of high Covid cases in February, says RGM

by AZREEN HANI / pic by TMR FILE

RETAIL Group Malaysia (RGM) has revised upwards Malaysia’s annual retail industry growth rate for 2022 from 6.3% to 13.1% due to the expected strong retail result during the second quarter of this year (2Q22).

For 1Q22, the industry recorded a strong growth of 18.3% in retail sales, compared to -9.9% reported in the same period in 2021.

The group said in a statement today that shopping traffic has returned to the pre-Covid level, despite the number of high Covid cases in February.

“However, Malaysia’s retail industry is still facing several major challenges for the rest of the year.

“Prices of necessities continue to rise since the beginning of this year. This supply-driven inflation has affected the purchasing power and lifestyles of Malaysians. This trend is expected to continue in the next few months,” RGM said.

The prices of the food and non-alcoholic beverages group rose an average of 3.8% during the quarter.

According to RGM, this group contributed 29.5% of the Consumer Price Index weight.

Private consumption expanded by 5.5% during 1Q22 due to increased retail spending, reopening of recreational facilities and higher domestic tourism.

The retail industry is anticipated to grow at 25.7% during the 2Q with contribution mainly from strong sales during the Aidilfitri festival.

The 3Q growth rate is estimated at 3.4% due to a low base in the same period a year ago.

Spending patterns should begin to normalise during this period.

For the last quarter of 2022, the Malaysian retail industry is hopeful of a 3.6% growth rate after a rosy performance a year ago.

Most members of the two retailers’ associations are upbeat on retail sales for the next three months, it said.

The industry projects an average growth rate of 25.7% during 2Q22.

However, the supermarket and hypermarket operators expect to remain in the red zone with a -3.5% growth rate for 2Q22. This is the lowest estimate among the retail subsectors during this quarter.

On the other hand, operators of mini-market, convenience stores and cooperatives are anticipating a sustainable growth rate of 6.8%.

RGM also said that retailers in the fashion and fashion accessories sector expect their businesses to continue to thrive with a 58.9% in growth rate during 2Q22, compared to the same period a year ago. This is the highest estimated growth rate among the retail subsectors during this quarter.