PETALING JAYA: The Malaysia Retailers Association (MRA) 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 Tan Hai Hsin 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 MRA 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 dependence on foreign tourists will be badly affected.
He singled out those in Johor Baru, Kota Kinabalu, Genting Highlands and all those at international airports.
Night entertainment outlets such as bars, pubs and dance clubs would continue to suffer, he said.
However, the expected closures post-Sept 30 by MRA members, numbering some 150 according 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 (above pic) 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 1997/97 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 mixed with a smaller contraction of 3.4% projected versus the 30.9% contraction in the second quarter.
Tan also debunked the myth that supermarkets and hypermarkets, as a component of the retail industry, was doing better than departmental stores, fashion, pharmacy and personal care and specialty 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 time, the manufacturers could not keep up with the sudden surge in demand, ” Tan said.
Source: https://www.thestar.com.my/business/business-news/2020/09/04/retailers-have-mixed-views-for-third-quarter