Malaysia’s retail industry is expected to grow 6.5 per cent this year, from last year’s 8.4 per cent growth.
The Malaysia Retailers Association (MRA), in its latest report, also anticipates the industry to grow 6.0 per cent next year.
For the fourth quarter this year, retailers in the country expect their sales to increase by 10.4 per cent, with specialty retail stores anticipated to record biggest sales growth at 15.9 per cent.
This is followed by fashion and fashion accessories at 14.9 per cent, department store-cumsupermarkets at 9.4 per cent and department stores at modest 3.7 per cent.
The specialty stores include retailers selling photographic equipment with photo processing services, optical products, sportswear and sporting equipment, fitness equipment, golf equipment, toys, souvenirs as well as touristrelated products.
Despite the optimism of these retailers, who are MRA members, the association itself estimates the retail sales to grow 5 per cent in the last quarter this year.
It said in the third quarter, the retail industry recorded a slower growth rate of 7.0 per cent in sales compared with 9.8 per cent expansion in the same period in 2010.
“Based on the latest retail results, Retail Group Malaysia
still maintains its retail industry growth rate at 6.5 per cent for the whole of 2011,” the MRA said in its December 2011 report.
The MRA said in the first nine months of this year, the industry registered a growth rate of 6.8 per cent. Similar to the first half of this year, retailers still had to absorb the rising cost of goods and offer very attractive bargains to attract shoppers,
While Bank Negara Malaysia is projecting an economic growth rate of between 5 and 6 per cent next year, MRA is anticipating the retail industry to moderate to 6 per cent.
The MRA said the unresolved eurozone debt crisis, the potential US double-dip recession and the recent decline in China export market will affect the country’s economy in 2012.
“When the export-oriented manufacturing sector slows down due to low external demand, it will affect local employment market. Some
Malaysians may be out of jobs next year, many will not get salary increments and graduates will not be able to find jobs.
All these will affect retail spending,” it said. Concerns about job prospects may make consumers keep a tight hold on their purse strings and only spend during sales or value-for-money