Malaysia's retail sector, which grew 5.5 per cent last year, is projected to grow six per cent this year, taking into account Malaysia's economic performance, higher inflation and the global economic situation.
In its Malaysia Retail Industry Report, the Retail Group Malaysia (RGM) said it is maintaining its earlier growth forecast of the retail industry at six per cent for 2013.
During the first quarter of this year, RGM is estimating the retail industry to grow 6.9 per cent, which is higher than the Malaysia Retailers Association (MRA)'s forecast.
"MRA members expect 5.9 per cent increases in their businesses during the first quarter of 2013. Small growth forecasts from the grocery as well as furniture and furnishing sub-sectors led to lower overall estimate," RGM said in a statement after interviewing MRA members on its retail sales performances for 2012 and 2013.
"The department store-cum-supermarket operators are expecting to maintain their growth rate at eight per cent, while department store operators are optimistic their businesses will grow by 10.1 per cent.
"Retailers in the fashion and fashion accessories sector are cautious of their future business prospect and anticipate a growth of 6.9 per cent during the first quarter of 2013 ... those in other specialty stores sub-sector, including photographic equipment with photo-processing services, optical products, sportswear and sporting equipment, second-hand goods, fitness equipment, toys, souvenirs, duty-free shopping goods as well as arts & crafts are confident of their businesses for the new year with an estimated growth of 10.2 per cent during the first three months."
For the second quarter, RGM expects the country's retail industry to grow five per cent, while the growth will firm up in the third quarter to six per cent year-on-year, driven by Ramadhan and Hari Raya celebrations.
The industry is projected to expand 5.8 per cent in the fourth quarter in view of school holidays, year-end sales and festivals.
RGM said many retailers have been enjoying better sales since the government handed out cash from mid-January under the second round of Bantuan Rakyat 1Malaysia to more than 12 million Malaysians.
Bookstores and related retail stores have also started enjoying rising sales since the RM250 1Malaysia Book Voucher was distributed to 1.3 million private and public university students recently.
RGM said since early February, handphone traders and retailers selling smartphone accessories have started to benefit from the RM200 rebate on smartphones for 1.5 million young adults aged between 21 and 30 years with a monthly income of not more than RM3,000.
It said for the fourth quarter of 2012, Malaysia's retail industry recorded a below-expectation growth rate of 4.7 per cent, as compared to the same quarter in 2011.
This is 24 per cent lower than the earlier estimate by retailers (at 6.2 per cent) compiled in December last year, as well as 18 per cent lower than the RGM's estimate of 5.7 per cent.
For 2012, despite the school holidays, the year-end sales and the festive celebrations, retail sales during this period did not grow as much as expected.