Today's Pick (27/12/11/226/688) Retail sales in Malaysia expected to grow 6pc next year

Retail sales in Malaysia expected to grow 6pc next year

RETAIL sales growth is expected to expand by six per cent in 2012, the slowest growth in three years.

The six per cent increase will ring in sales to the tune of RM86.9 billion.

The expansion this year is 6.5 per cent, representing RM82 billion in retail sales.

The growth takes into account inflation. Inflation in 2011 is likely to be around 3.2 per cent but is expected to ease to below three per cent next year.


Uncertainties in the global economy and the possibility of job losses and fewer increments and jobs would put less money into the consumers’ pockets as confidence level erodes.

This is expected to prompt consumers to look for bargains before they part with their money.

The retail numbers are projected by Retail Group Malaysia (RGM) Sdn Bhd on behalf of Malaysia Retailers Association (MRA) but
does not take into account bulk items like cars and houses.

“The unresolved eurozone debt crisis, the potential double dip recession in the United States and the recent decline in China’s export market will affect the Malaysian economy in 2012,” said RGM managing director Tan Hai Hsin.

He said when export-oriented manufacturing sector slows down due to low external demand, it would affect the local employment market.

“Some Malaysians may be out of jobs next year, many will not get salary increments and graduates will not be able to find jobs. All these will affect retail spending,” he said.

Malaysian consumers will start being cautious about their spending as they will worry about future job prospects.
“They will wait for a sale before they buy. Grocery retailers need to continue to keep prices low in order to attract shoppers to their stores regularly.


“Department stores and fashion retailers need to use discounts and promotions to attract shoppers.” Purchasing power will be further dampened as the costs of retail goods are expected to rise due to increases in raw material and transportation costs.

On a more positive note, 1.2 million government servants were given salary increment and bonuses recently.

A one-off payment of RM500 will also be given out to families with income of less than RM3,000 per month starting from next month. “All these moves will boost retail spending to a certain extent next year,” Tan said.

Source : Business Times
Date : 27 December 2011
Today's Pick (27/12/11/226/688)