Market Info
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Malaysia’s 2022 Retail Outlook Positive: Industry Report Compiled by Retail Group Malaysia
hile 2021 saw disappointing retail growth due to the stayhome order for shoppers and the close-shop ruling for store owners, most retailers have risen to the occasion. They have upped their game by moving online, providing the unexpected and meeting customers eye-to-eye. The country’s retail industry report released in November 2021 and published by the Retail Group Malaysia projects 6% growth rate in retail sale for 2022. Are we on the road to recovery after almost two years of poor growth caused by the pandemic? Retailers gave a resounding yes, but challenges still remain. They cite high daily positive cases as a worrying factor. There is also the possibility of a fourth-wave of pandemic that is haunting the local retailer sector. “Malaysian non-essential retailers cannot afford another forced closure of physical stores,” the report noted. Omicron, the new COVID-19 variant classified as a variant of concern by the World Health Organisation on November 26 and first detected in Malaysia on December 3, is now spreading rapidly across the world. This will have an effect on the economic recovery around the world as well as in Malaysia. The Malaysian government’s decision to delay the country’s transition into the endemic phase due to uncertainty of the virus
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Malaysia Retailer Vol 9 No 3
pandemic will likely strain the country’s economic progress in the months ahead. Another factor that could affect the retail industry are foreign tourists arrivals, which could see lackluster growth due to the current virus development. This will affect retail businesses that have been dependent on leisure travelers. The country’s retail industry report also foresees the spike in the prices of consumer goods to continue in 2022. Rising cost of living will also affect the purchasing
power of Malaysian households in 2022.
REVIEW OF 2021 Malaysia’s retail performance for the third quarter of 2021, recorded a disappointing growth rate of -27.8% in retail sales, as compared to the same period in 2020 (Table 1). This quarterly result was much lower than what was expected by members of MRA and MRCA in September 2021. This was in part due to the enhanced movement control order
Table 1 : Year-on-Year Percentage Change In Retail Sales by Retail Sub-Sector, 2021 Retail Sub-Sector
1st Qtr 2nd Qtr % 3rd Qtr
Department store cum supermarket
-14.5
-7.5
-41.9
Department store
-24.3
+18.2
-43.6
Supermarket and hypermarket
-11.9
-12.3
-12.5
Mini-market, convenience store & cooperative
-3.7
+2.6
+2.6
Fashion and fashion accessories
-23.4
+2.6
-63.6
Children and baby products*
-12.2
+2.6
-48.4
-6.2
+10.0
-10.3
Personal care** -17.7 Furniture & furnishing, home improvement +35.3 as well as electrical & electronics Other specialty retail stores -0.1
-36.1 -1.1
-51.7 -28.5
41.4
-20.7
Pharmacy**
Notes: *- children and baby products include apparel, accessories, equipment, school uniform and toys **- pharmacy and personal care stores were grouped under one category in Year 2020 Source: MRA/ MRCA/ Retail Group Malaysia
