KUALA LUMPUR (Dec 2): Retailers in Malaysia saw a dismal July-Sept 2019 performance as the sales contractions in the department store and the supermarket and hypermarket categories weighed down on the overall retail performance. Third quarter retail sales grew by a mere 1.8%, the latest data released by the Retail Group Malaysia shows.

Accordingly, retail sales growth in the Jan-Sept 2019 was at 3.6 % compared to a 4.3% growth in the corresponding period of 2018.

The poor performance in 3Q2019 was also a result of a high base rate last year, as the months of July and August 2018 still enjoyed a tax break before the re-introduction of the Sales and Services Tax on September 1. Retail sales expanded by 6.7% in July-Sept 2018.

RGM’s managing director Tan Hai Hsin in the latest retail industry report done on behalf of the Malaysia Retailers Association, says that the latest quarterly results – which is lower than the 3.2% projected – was also a result of low consumer confidence which led to poor sales. “Unsettled global market environment and slow domestic economic activities discouraged consumers from spending more,” he said. This is also in line with the third quarter consumer sentiment index which had declined to 84 points - the lowest reading since the fourth quarter of 2017.

The department store sub-sector shrank by 2.3% while the supermarket and hypermarket segment by 3.2%. “Store closures and weak retail market continues to affect the performance of the supermarket and hypermarket sub-sector,” Tan said in his report. Recall that Dairy Farm International has shut several Giant hypermarkets and Cold Storage supermarket outlets during the year.

The fashion and fashion accessories sub-sector while posting a growth, only expanded by 1.6% while the department store cum supermarket business grew by 0.6%.

However, the other specialty retailers such as photo stores, optical store and tv shopping channel fared better growing by 5.5%. The pharmacy and personal care sub-sector was the best performer clocking-in a growth of 8%.