Published: Tuesday April 29, 2014 MYT 12:00:00 AM
Updated: Tuesday April 29, 2014 MYT 9:55:32 AM
|“There are new malls coming up and there is still demand for retail space,” |
said Malaysian Association for Shopping and Highrise Complex
Management past president Richard Chan (pic). “However,
we do expect more careful spending.”
PETALING JAYA: The local retail sector is expected to grow at a slower pace in the second quarter, mainly due to cautious consumer spending and lack of festive holidays during the period.
“There are new malls coming up and there is still demand for retail space,” saidMalaysian Association for Shopping and Highrise Complex Management past president Richard Chan (pic). “However, we do expect more careful spending.”
The Malaysia Retail Industry, in its report last month, echoed this sentiment when it forecast retail sales in the second quarter of the year to expand 5%, due to cautious consumer spending as prices of more products and services rose.Chan said the second quarter generally tended to be “the slowest period” in terms of sales for the retail sector.
“It’s quite cyclical. Sales were good up to Chinese New Year and most people would have already done all their spending then. We expect sales to pick up in July when it’s Hari Raya.”
Chan, nevertheless, said that he expected certain segments to continue to do well.
“There are some food and beverage outlets in malls like Mid Valley where people are queueing up to eat! It also depends on the promotions that are done.”
He added that consumer sentiment was cautious due to uncertainty created by the impending goods and services tax (GST), which takes effect on April 1 next year.
“In some countries, just before they implemented their own GST, people were buying things like crazy. We expect that to happen here. For now, many are waiting to see if prices will drop.”
According to the Malaysia Retail Industry’s report, the Hari Raya celebration is expected to contribute to 6.3% growth in retail sales during the third quarter.
“However, the likely increase in overnight policy rate by the second half of the year may affect retail sales of big-ticket items,” it said, adding that the entire 2014 was expected to see an overall growth of 6%.
Kenanga Research in its report earlier this month on the consumer sector pointed out that higher cost of living, increased subsidy rationalisation and anticipation of GST being implemented were among the factors which would underpin the more cautious spending habits of customers.
“More recent negative news that have transpired include the likely increase in overnight policy rate by the second half of the year as well as lower tourist arrivals for Visit Malaysia Year 2014 due to the missing flight MH370.”