Retail Group Malaysia downgraded Malaysia’s 2016 retail sales growth to 3% from 3.5%, after third quarter’s on-year 1.9% sales rise came in below market forecast.
In a report, research firm Retail Group said it expected 2017 to be a “challenging” year for the country’s retailers, as consumers contended with costlier goods and services amid a weaker ringgit.
“This is the second revision in 2016 on the retail sales growth rate. This is mainly due to the poor performance of retail sales during the third quarter of this year.
“For the third quarter of 2016, Malaysia retail industry reported a disappointing growth rate of 1.9% in retail sales, as compared to the same period in 2015. This latest quarterly result was below market expectation. It was 68% lower than the estimate made by members of Malaysia Retailers Association (MRA) in August 2016 (at 5.9%),” Retail Group said.
Retail Group derives its data from MRA members’ sales numbers.
For 2017, Retail Group said it projected a 5% growth in the nation’s retail sales in anticipation of “significant recovery” during the second half of the year.
The first half is, however, expected to be tough for retailers as consumers curb spending.
“As the economy is not expected to recover strongly in the immediate term, Malaysian consumers are expected to hold back on their spending during the first half of next year (2017). At the same time, cost of living of average Malaysians will continue to rise in 2017 (including foods and beverages, medical, transportation, etc.)
“The continued weakening of the ringgit will impact the costs of retail goods. Retailers may be forced to raise prices again during the first 6 months of next year,” Retail Group said.
(Source: The Edge Markets)