11-3-2024 (KUALA LUMPUR) Malaysia’s retail industry faced a challenging quarter as sales slipped 0.2 percent year-on-year in the final three months of 2023, according to Retail Group Malaysia (RGM). The decline was attributed to the rising cost of living, which eroded consumers’ purchasing power.
In a statement released on Monday, RGM acknowledged that the fourth quarter’s outcome fell short of market expectations, which had anticipated a 2.1 percent growth. The higher cost of living proved to be a significant headwind, negatively impacting the spending capacity of Malaysian consumers.
While the fourth quarter posed challenges, Malaysia’s retail industry managed to register a positive growth rate of 2.2 percent for the full year 2023. However, this annual figure also underwhelmed market projections, reflecting the broader economic pressures faced by the sector.
Looking ahead, RGM anticipates a rebound in the first quarter of 2024, forecasting a 7.1 percent year-on-year growth in retail sales. This optimistic outlook is fueled by the upcoming Chinese New Year festivities and school holidays, which are expected to bolster consumer spending.
Moreover, RGM has revised its annual growth projection for 2024 upwards, adjusting it from 3.5 percent to 4 percent. This upward revision suggests a cautious optimism within the industry, as retailers brace for potential challenges while capitalizing on seasonal opportunities.
Addressing the road ahead, an RGM spokesperson stated, “For 2024, the biggest challenge for the Malaysian retail industry remains the rising cost of living of Malaysian consumers.” Effectively managing inflationary pressures and preserving consumers’ purchasing power will be critical for the industry’s sustained growth and recovery.
