KUALA LUMPUR (July 15): The Edge weekly in its latest edition said that the string of popular businesses that have closed over the last three months, especially in the retail and food and beverage (F&B) sectors, seem to be in contradiction with the strong set of economic data that has brought some cheer to the country.

In its cover story, the Edge’s Esther Lee and Chester Tay wrote that gross domestic product figures surprised on the upside in the first quarter of 2017, with growth at a robust 5.6% year on year.

The weekly reported that with continuously improving data from the manufacturing industry and exports since January this year, economists are convinced that growth can be sustained above 5%, at least for the first half of 2017.

Yet, sentiment on the ground, among consumers and businesses, paints a starkly different picture, it said.

Retail sales were down in 1Q2017, contracting 1.2% year on year and coming in below market expectations.

Quoting Retail Group Malaysia managing director Tan Hai Hsin, it said: “Although GDP growth was good in the first quarter of 2017, it was not reflected in retail sales during the same period. MIER (the Malaysian Institute of Economic Research) did not produce good indications during the period as well.

 “We believe only certain public and private sectors contributed to this growth, including government expenditure, infrastructure, construction, information technology and export. As the growth was not broad-based, it did not benefit the rakyat,” Tan told the Edge.

Meanwhile, the Consumer Sentiments Index tracked by MIER has not breached the 100-point optimism threshold since 3Q2014. Nevertheless, it improved to 76.6 points in 1Q2017 from 69.8 in 4Q2016.

The Edge added that where businesses are concerned, perhaps still fresh in the mind of Malaysian consumers is the closing down of South Korean bakery Tous Le Jours and cosmetics brand Nature Republic. Both closures happened abruptly.

It emphasised that where was also the less-than-a-day closure notice by True Fitness in Malaysia, which caused public outrage.

Shortly after, consumers were again caught off their guard when South Korean barbecue restaurant Bulgogi Brothers and Michelin star Hong Kong restaurant Tim Ho Wan put up the shutters, it said.

Interestingly, MIER’s Business Conditions Index climbed to 112.7 points in 1Q2017 from 81.2 in 4Q2016.

To understand more of the direction of the Malaysian retail and F&B sectors going forward, get a copy of the Edge for the week of July 17 – July 23 available at newsstands now.

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