KUALA LUMPUR (Nov 29): Malaysia retailers contended with weaker sales in recent months on cautious consumer sentiment, The Edge Malaysia business and investment weekly (Edge Weekly) reported in its latest December 1-7 issue.
Edge Weekly, quoting retailers and shopping mall owners, reported that rising cost of living, and concerns over the planned implementation of the Goods and Services Tax (GST) had affected buyer sentiment. The GST will be implemented starting April 1, 2015.
According to Edge Weekly, while it appeared that parking lots at shopping malls were full, this was not a sign that people were shopping. Shopping mall owners were quoted as saying patronage increase at their premises was not reflected in sales volume.
Tan Sri Teo Chiang Kok, whose family owns a controlling stake in the 1 Utama Shopping Centre, said retail tenants, which had been hit hardest were those involved in fashionable and non-essential items.
Teo said retail sales declined due to higher cost of living. “People are feeling poorer because the cost of living is rising. Hence, their budget for discretionary spending is reduced. Consumers are tightening their belts,” he said.
It is worth noting that sales of essential items like food and beverage had also decreased.
Edge Weekly quoted Mydin Mohamed Holdings Bhd managing director Datuk Wira Ameer Ali Mydin as saying same store sales at his stores fell in the six months ended September 30, 2014.
The Mydin group runs hypermarkets, mini-markets and convenience stores, which target the middle to lower-income group.
“For the first time in 25 years, overall same store sales are down. Our same store growth is down 5%. Everything is down. Even (sales) of basic (items) are down 3%,” Ameer said when asked whether consumers were shopping less.
Basic items refer to essential goods like milk, sugar and flour.
For a better understanding on the Malaysian retail backdrop and its challenges, kindly pick up and read the latest issue of the Edge Weekly.