KUALA LUMPUR: MIDF Research has maintained a positive outlook on the consumer sector due to expected solid domestic retail growth in 2023 and 2024.
In a note today, the research firm said its assessment is underpinned by the strong job market and income prospects, sustained demand for essential items, a resurgence of out-of-home consumption following the reopening of the economy, various initiatives introduced in Budget 2024 to support consumer spending and an uptick in tourist arrivals.
“This outlook aligns with MIDF economists’ optimistic retail trade forecast for 2023 in its Economic Review: August 2023 Distributive Trade,” it added.
MIDF Research said that Family Mart within QL Resources Bhd will be among those that will reap the benefits of this upward trend, particularly from the increased out-of-home consumption of food and beverage products and the rise in tourism activities.
“Furthermore, owing to their competitively priced products, Padini Holdings Bhd is well-positioned to benefit from the various cash aids allocated to the B40 income group and civil servants,” said MIDF Research.
Meanwhile, Maybank Investment Bank Bhd maintained its “hold” recommendation on Berjaya Food Bhd (BFood) with an unchanged target price of 65 sen as the expectation of consumer sentiment to remain subdued with down-trading and sales volume slowdown concerns afflicting the overall retail industry.
“We believe that consumer sentiment has remained subdued in the first quarter of the financial year 2024 with tighter consumer spending and down-trading trends emerging as a result of broad-based food inflationary pressure.
“BFood may experience a similar sales trend in the near term, but its strong brand equity and beverage product innovations could partially buffer the weaker sales and keep store footfall steady,” it said. – Bernama