PETALING JAYA: Malaysia’s retail sale is anticipated to see a 6.3% growth for 2022, an improvement over a prior estimate of 6% made in November last year, according to independent retail research firm Retail Group Malaysia (RGM).
Although the industry looks forward to a recovery, it is cognisant of the challenges in the year, particularly the impact of the Omicron wave that had resulted in a high number of new infections and increased hospitalisation rates.
RGM pointed out that daily positive cases climbed to a high of 20,000 on Feb 11 and has translated to a gradual drop in car traffic as infections remain above that threshold.
Nonetheless, it pointed out that the retail industry expects the first quarter of 2022 to report a 16.5% growth on the back of Chinese New Year celebrations and further relaxation of standard operating procedures.
RGM estimated department store cum supermarket operators to maintain its recovery momentum with a growth rate of 28.2% for Q1’22, while department store operators are expecting a 29.9% growth and operators of mini-market, convenience store and cooperative are anticipating a growth of 9.5%. On the other hand, the supermarket and hypermarket sub-sector will see its business to decline by 6% for the first quarter of 2022.
For the fashion and fashion accessories sector, it had eyed a strong recovery with a 34% growth in the quarter and retailers in the children and baby products is expected to see a 14.3% growth. Similarly, pharmacy operators expected a 12.3% expansion and those in the personal care sub-sector are hopeful for a 20.5% growth. Retailers of furniture & furnishing, home improvement as well as electrical & electronics are expecting to maintain their growth momentum with a growth rate of 14.0% in Q1.
“Once again, retailers in other specialty stores sub-sector including photo shops, fitness equipment, second-hand goods, musical instruments as well as TV shopping are less optimistic. They foresee business to slide by 19.2% during the next 3-month period. This will be the worst performer among the retail sub-sectors during this period.”
In the food & beverage (F&B) segment, cafe and restaurant operators are foreseeing businesses to climb by 31.2% in the first quarter of the year, while F&B kiosk and stall operators are anticipating business to increase slightly at 1.9%.
Moving forward, RGM noted the high daily positive cases and increased hospitalisation rates remain worrisome.
“This fourth-wave virus pandemic is haunting Malaysian retailers again.”
The firm also pointed out that prices of basic necessities and many consumers’ goods have risen since the end of last year, resulting in many F&B outlets increasing their prices.
For the first half of 2022, it expects the rising prices to continue, noting that oil prices have been rising in recent weeks.
“Higher cost of living will affect the purchasing power of Malaysian households in the new year. Possible rate hikes in the near term will also have a negative impact on buying power of Malaysian consumers.”
As for the war in Ukraine, RGM believes it will affect the supply chain of consumers’ goods worldwide. This unexpected war will also lead to even higher oil prices and commodity prices.
In Q2’22, it projected retail to grow 4.2% attributed to the Hari Raya festival, followed by a third quarter growth of 3.4% on the back of a low base in the same period last year. By then, Malaysia should have begun its endemic phase of Covid-19. For the final quarter of 2022, Malaysia’s retail industry is hopeful of a 3.6% growth rate after a rosy performance a year ago.
