Association says the sector has not stabilised
PETALING JAYA: The Malaysia Retailers Association CMRA) is expecting closures to speed up after the loan moratorium ends on Sept 30, with more job cuts in the sector, Retail Group Malaysia managing director Tart Hai Hain said.
Although there is some semblance of normalcy today, the retail industry “has not stabilised.”
More job losses are expected in the next few months: Tan said The business outlook of MBA members are “mixed for the third quarter but there are some retailers that are expanding their operations.
He reckoned that with the recovery movement control order (MCO) being further extended until Dec 31, retail stores that are highly dependent on foreign tourists will be badly affected.
He singled out those in labour Baru, Kota Kinabalu, Denting Highlands and all those at international airports.
Night entertainment outlets such as bars, pubs and dance dubs would continue to suffer, he said.
However, the expected closures post-Sept 30 by MRA members, numbering some 150 according to the MRA website, will also be balanced by new store openings but this will be limited.
In the latest September Malaysia Retail Industry Report, Tan said 2020 would distinguish itself as “the worst period for retailers in Malaysia since 1987” as a result of the mid-March MCO.
On a quarterly basis, the April-June quarter is expected to be the worst” quarter in the history of Malaysia’s retail industry.
During the 19-97/97 Asian Financial Crisis and the 2008 Global Financial Crisis, “stores were never asked to shut completely and people were never asked to stay home,” he said.
Malaysia’s retail industry saw a contraction of 30.9% in sales for the April-June quarter, compared with a growth of 4.5% a year ago.
On a broad picture basis, this drop by a close to a third far exceeded. the 17.1% contraction in the gross domestic product (GDP), tan said.
He added that members had expected it, having projected a 28.8% drop in retail sales.
Over a six-month basis, the industry saw a 20.2% contraction in retail sales.
Going forward, he said the outlook by MRA members for the third quarter was raised with a smaller contraction of 3.4% projected versus 30.9% contraction in the second quarter.
Tan also debunked the myth that supermarkets and hypermarkets, as a component of the retai] industry, was doing better than departmental stores, fashion, pharmacy and personal care and speciality sectors.
Empty shelves and goods flying off the shelves only happened for a short period of time. This is because of our ‘kiasu’ or ‘panic’ behaviour initially as Malaysians try to stock up the food supplies.
After a week Or two, it was back to normal. At that tune, the manufacturers could not keep up with the sudden surge in demand,” Tan said.
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