Savills (M) Sdn Bhd head of retail services Murli Menon said the performance of Malaysia’s retail market for 2020 will depend on the growth of tourist arrivals boosted by the Visit Malaysia 2020 (VM2020) campaign. According to him, the retail performance has lowered down especially in the third quarter of 2019. Categories like beauty and wellness, which have been seeing double-digit growth, have slowed down as well.
He said “Much would hinge on the growth of tourist arrivals next year, given that it is going to be a Visit Malaysia Year. The Ministry of Tourism, Arts, and Culture (Motac) is also planning an aggressive campaign for the same. The retail performance so far has been quite sluggish. As such, most retailers tone down their growth expectations for the year,”.
According to recent data from Retail Group Malaysia (RGM), the Motac aims to welcome 28.1 million tourists and collect RM92.2 billion worth of tourism receipts. Domestic retail industry growth slumped to 1.8% in 3Q19 from a 6.7% growth in the same quarter last year.
The latest quarterly growth was below market expectations as members of the Malaysia Retailers Association (MRA) projected an expansion of 3.2% in 3Q19. It was also weaker than the 4.5% increase registered in 2Q19.
According to the statement published by Retail Group Malaysia (RGM), “The high growth rate (in 3Q18) was fuelled by the remaining two months of the tax break, before the Sales and Service Tax was reintroduced in September 2018. Malaysian consumers rushed to retail stores to buy more in order to save more. For the month of September 2018, many retailers maintained their prices in order to attract shoppers to buy,”.
For the first nine months of this year, retail sales expanded 3.6% compared to the same period a year ago. As such, RGM has revised downwards its expected retail growth for 4Q19 to 3.8% from 5.8% previously, while full-year growth is forecast at 3.7% versus the previous estimate of 4.4%.
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