KUALA LUMPUR (March 8): The retail industry in Malaysia registered its worst performance in two decades last year, contracting by 16.3%, as the Covid-19 pandemic forced people to stay home and retail stores shut. A majority of the retail sub-sectors contracted by double digits, with the department store and fashion and fashion accessories segments shrinking the most at 38.3% and 37.9% respectively, the latest edition of the Malaysia Retail Sales Report (March 2021) showed.
Retail expansion forecast for 2021 has also been revised downwards to 4.1% from 4.9% after major states nationwide were once again placed under the movement control order (MCO) for the most part of the current quarter. The first-quarter performance is estimated to shrink by 13.4% before experiencing a recovery in the next three quarters.
“Last year, Malaysia’s retail industry recorded the worst performance since the Asian financial and economic crisis that took place 22 years ago. In 1998, retail sales in Malaysia dropped by 20%,” Retail Group Malaysia (RGM) managing director Tan Hai Hsin said in the report released this morning. Retail sales contracted for four consecutive quarters at 11.4%, 30.9%, 9.7% and 19.7% respectively.
The full-year retail performance was also far worse than the contraction of 5.6% in gross domestic product (GDP) in 2020. In 1998, GDP contracted by 7.4%.
For the past 23 years, RGM has been publishing retail data on behalf of the Malaysia Retailers Association (MRA). It has now decided to also partner the Malaysia Retail Chain Association (MRCA) to release a more comprehensive set of data.
In 2020, with the exception of mini-markets, convenience stores and cooperatives which expanded by 14.8%, and furniture and furnishings, home improvements and electrical and electronics (E&E) which grew by 0.4%, all retail sub-sectors contracted by double digits.
The retailer segments which suffered included children and baby products (-20.2%), department stores cum supermarkets (-18.7%), food and beverage (F&B) outlets (kiosks and stalls) (-18.3%), F&B (cafés and restaurants) (-12.8%), supermarkets and hypermarkets (-12%), pharmacy and personal care (-11.8), and other specialty retailers (-11.7%).
Malaysia’s 4Q20 retail sales down 19.7%