Despite a very challenging 2021, Sunway Malls has seen better traffic and sales recovery since the easing of restrictions in Phase 4 of Malaysia’s National Recovery Plan. According to the group’s Q4 2021 figures, both traffic and sales have recovered to 100 percent normality benchmarked against pre-pandemic Q4 2019 which was its historical high quarter.
The 100 percent normality recovery in Q4 2021 came in higher against the 70 percent normality recovery in Q4 2020. A strong pent-up demand, festive seasonality, high percentage of fully vaccinated population and deescalating Covid-19 daily numbers were among to key drivers in aiding the recovery. Improving consumer sentiments also paved the way for better consumer spending on the back of better labour market expectations.
Historically, Q1 and Q4 are the mall and retail industries peak quarters due to festivities.
The mall group also highlighted that 92 percent of its retailers reported sales recovery with 32 percent saw sales recovery exceeding 100 percent which included among others jewellery, health & personal care, digital lifestyle and others. Fashion & beauty categories recovered between 80 percent-85 percent while F&B saw recovery between 85 percent-90 percent. On an aggregated basis, F&B recovery is slightly above non-F&B between 5 percent-10 percent.
“We are seeing differentiated recovery rates across different retailers. It is largely dependent on the retail sub-sectors they are in. Consumer electronics category is an outperforming sub-sector as consumers seek digital connectivity while leisure & entertainment is still hampered by capacity limitation. But on a collective aggregate basis, they worked out to be 100 percent normality,” explained HC Chan, CEO of Sunway Malls & Theme Parks.
Another key factor affecting the differentiated recovery rate was the different reopening timeline for different retail sub-sectors.
“In 2021, in totality there was 150 days of lockdown before all retail sub-sectors were permitted to operate compared to only 50 days in 2020. This three times longer duration which was equivalent to 5 months of non-full trading meant there was a lot of catching up to do for the mall & retail businesses,” Chan pointed out.
Preliminary January 2022 figure indicated that the momentum is still sustaining well with traffic on 1st January being the best traffic count for the past 22 months. The mall group expects a strong January performance.
In spite of the current and future headwinds, Sunway Malls continue its expansion mode with development of more retail space. The mall group had added 500,000 sqft retail space expansion in Sunway Carnival which has been 95 percent leased out and expected to open April 1, 2022. Sunway also recently announce plans to build a mall with a retail space of 700,000 sqft in Sunway City Ipoh which is expected to be completed by 2025.