MALAYSIA'S retail industry grew by 5.9 per cent in the second quarter of this year but was much lower than the 11.7 per cent growth forecast by retailers compiled in August.
The growth is, however, slightly better than the 5.5 per cent forecast by Retail Group Malaysia (RGM), said its managing director Tan Hai Hsin.
He noted that for the first six months of the year, retail sales expanded by 6.2 per cent as compared with the same period in 2011.
"During this quarter, retailers still needed to absorb the rising cost of goods and offer discounts to attract shoppers," Tan said in the latest Malaysia Retail Industry Report.
In fact, many retailers suffered negative growth in their profit margins, he added.
As for the third quarter, Tan said members of the retailers association expect a moderate 5.3 per cent growth in their businesses.
However, RGM expects a 5.5 per cent growth in the third quarter of this year .
RGM noted that it has actually revised the growth for the third quarter to 5.5 per cent from an earlier forecast of six per cent.
"This is slightly above the average growth estimate given by Malaysia Retailers Association (MRA)," Tan said.
He said the growth rate will likely be supported by the Hari Raya celebration.
"Furthermore, 1.25 million civil servants and 657,000 government pensioners received cash payment during that period.
"In addition, the government introduced several incentive programmes during the period, including the 1Malaysia Student Discount Card for university students and 1Malaysia Privilege Card for armed forces personnel and police officers," he said.
RGM expectsthe retail industry to expand by 5.5 per cent in the final quarter of 2012.
"This growth rate will be supported by the festive holidays, school holidays and year-end sales. Nevertheless, Malaysian consumers will still remain cautious in their retail spending," Tan said.
For the whole of this year, he said RGM expects the growth rate of Malaysia's retail industry to stay at six per cent, although Bank Negara has improved the expected gross domestic product growth rate to between 4.5 per cent and 5.0 per cent.