To nobody\u2019s surprise, Malaysians are now shopping less, and this has caused a dip in retail sales around the country.<\/p>\n
According to Retail Group Malaysia, the local retail industry recorded a 4.4% fall in sales in the first quarter (Q1) of 2016, compared to a 4.6% growth a year ago.<\/p>\n
The fall was attributed to the pre-goods and services tax (GST) frenzy last year, during which consumers\u2019 spending rose sharply during the last weeks before the implementation of the tax on April 1, 2015.<\/p>\n
Weak Chinese New Year sales in February 2016, coupled with rising costs of retail goods and services resulting from the weaker Ringgit, have further contributed to the decline.<\/p>\n
Although a negative first quarter growth rate was expected, the Malaysian Retailers Association (MRA) reported that the results were below the industry expectation of a 4% fall in sales.<\/p>\n
\u201cRetailers continued to depend on heavy price discounts to attract Malaysian consumers to buy. As a result, their profits were eroded,\u201d the report said.<\/p>\n
It also stated that all retail sub-sectors recorded declines in their businesses during the first quarter except the \u201cOther Specialty Retail Stores\u201d sub-sector.<\/p>\n
The Department Store\/Supermarket sub-sector recorded a negative growth rate of 7.3%, suffering the worst performance among the retail sub-sectors for Q1 2016.<\/p>\n
The Supermarket and Hypermarket sub-sector also reported a weaker-than-expected growth of -4.2%, its fourth conservative negative quarterly growth rate.<\/p>\n
However, MRA members are optimistic that businesses will return to black during Q2 2016 with an average growth rate of 9.9%.<\/p>\n
The estimated growth rates for Q3 and Q4 2016 are 5.0% and 5.5% respectively.<\/p>\n
\u201cThe greatest challenge in 2016 for the retail industry in Malaysia is still consumers\u2019 spending.\u00a0After one year of implementing GST, Malaysian consumers are still holding back on spending,\u201d the association pointed out.<\/p>\n
It added: \u201cFurther increases in cost of living in the near future will worsen it.\u201d<\/p>\n