Experts claim Malaysians’ appetite for spending remains poor

Malaysian consumers continue to tighten their belts as reflected by the 0.3% year-on-year growth of retail sales in the fourth quarter of 2016 (4Q16), according to Retail Group Malaysia (RGM).

The quarterly growth of retail sales decelerated for the third quarter after it hit a high of 7.5 per cent in 2Q16, based on data compiled by RGM from members of Malaysia Retailers Association (MRA).

Retailers are pessimistic about the sales performance for 1Q17. “As consumer confidence remains low, they estimate an average growth rate of only 0.9 per cent during 1Q17,” said the report.

“The year-end school holiday and festive celebration did not motivate Malaysian consumers to spend more. The weak economic environment and bleak job prospect discouraged shoppers to buy more than usual.

“4Q16’s growth rate was a let-down taking into consideration the low growth rate of 1.3 per cent during the same period in 2015,” said RGM in its latest quarterly report that was released over the weekend.

For 2016, domestic retail sales expanded by 1.7 per cent, which was not much stronger compared with 1.4 per cent growth in 2015 — the year when goods and services tax was introduced in April that year.

“After almost two years, the retail industry has yet to recover. Economic condition remains tough for retailers,” said RGM.