KUALA LUMPUR, Oct 31 — Malaysia’s retail sector is in "crisis”, PKR Youth claimed today amid news reports that popular hypermarket chain Giant will be shuttering five outlets nationwide next month.

The federal Opposition party’s wing chief Nik Nazmi Nik Ahmad said the news reports show the economy is not as rosy as painted by the government, and which he accused of administratively failing the local businesses.

"The disorderly introduction of the GST tax and the decline in the ringgit’s value to the extent of causing a rise in the prices of goods clearly have an impact on traders and also consumers who are having lesser spending power,” he said, referring to the goods and services tax introduced in April 2015 to replace the sales and service tax.

Nik Nazmi also questioned the fate for employees of Giant and the workers of other businesses that have dealings with the hypermarket chain.

"What happened to Giant is only part of a crisis that has struck the country’s retail sector. Many small and medium-sized stores and suppliers have become victims.

"The uncertainty of their future is due to the BN government’s policy that has failed to defend the people,” he claimed, but did not elaborate with figures or other examples on the alleged retail crisis.

He went on to claim that the Budget 2018 tabled last Friday does not provide solutions for Malaysian problems but only carried promises of election goodies.

Last week, GCH Retail (Malaysia) Sdn Bhd was reported saying by theSun Daily that it would stop operating five of its 54 Giant outlets on November 5 when the leases for these stores expire, adding that this was in a bid to improve efficiency and productivity.

In June news reports, Retail Group Malaysia’s (RGM) industry report showed that the local retail sector suffered an overall -1.2 per cent of growth rate in the first quarter this year, with the supermarket and hypermarket sector recording the worst contraction in growth among the retail sub-sectors at -4.8 per cent.

The only retail sub-sector that recorded a growth in the first quarter is pharmacy and personal care at 3.7 per cent, with these retailers predicting a growth rate of 4.9 per cent for this second quarter.

RGM said local retailers are hopeful that their business will pick up by the second quarter with a projected average growth rate of 4.8 per cent, with several sectors such as the supermarket and hypermarket sub-sector expecting recovery in the second quarter (1.2 per cent), department store cum supermarket (6.2 per cent), department stores (6.1 per cent), fashion and fashion accessories (12.6 per cent).

RGM projects local retail sales to grow by 4.8 per cent in this second quarter, 5 per cent and 5.5 per cent in the third and fourth quarter this year, with an overall growth rate this year for Malaysian retailers expected to be at 3.9 per cent.