KUALA LUMPUR, March 9 ― Malaysia’s retailers enjoyed a boost in business from October to December 2021 period as Malaysians did more shopping as tourists and for the festive celebrations for Christmas and Chinese New Year, but still contracted by 2.3 per cent for the entire year, a retail research firm said.

In its latest report released today, research firm Retail Group Malaysia noted that Malaysia’s retail industry had recorded a promising and robust growth in sales of 26.5 per cent during the fourth quarter of 2021 or the last three months of the year, when compared year-on-year to the fourth quarter of 2020 which had recorded a -19.7 per cent growth rate.

This positive performance was higher than the retail industry’s own projection in November 2021 of 18.3 per cent for the October to December 2021 period, the report said.

But after having recorded a -9.9 per cent decline in sales in the January to March 2021 period, a positive 3.4 per cent growth in the April to June 2021 period and a -27.8 per cent decline in the July to September 2021 period, the retail industry in Malaysia ultimately declined by 2.3 per cent in sales for the entire 2021.

“The dismay sales performance during the first nine months of 2021 dragged down the overall growth. The sales turnover generated during the last three months of the year was not sufficient to compensate for the heavy losses incurred earlier.

“This is the second consecutive year the Malaysia retail industry recorded a negative growth rate. In 2020, the retail industry contracted by 16.3 per cent as compared to the previous year,” the report said.

In explaining the improved performance of Malaysia’s retailers’ business in October to December 2021, the report had listed the lifting of more restrictions that were put in place as precautionary measures to reduce the spread of the Covid-19 virus.

“Started from October 1, spa, wellness centre and massage centre were allowed to re-open to fully vaccinated public,” the report said.

The report also noted that the ban on interstate travel in Malaysia was lifted on October 11 after 90 per cent of the country’s adult population was fully vaccinated against Covid-19, which then resulted in increased travelling locally with a positive spending impact that was felt throughout the country.

“Domestic tourism brought more sales to retailers that were dependent on tourism spending. It benefited retail outlets located in not just Klang Valley, but also Langkawi, Georgetown, Ipoh, Genting Highlands, Cameron Highlands, Pangkor Island, Desaru Coast and Melaka,” the report said.

The report also noted that all states in Malaysia were by November 30 in Phase 3 and Phase 4 of the National Recovery Plan — phases which had lesser Covid-19 restrictions — and that 96.9 per cent of Malaysia’s adult population had by then completed their Covid-19 vaccination.

“Retail sales climbed higher in December due to two major festivals — Christmas and Chinese New Year. Malaysian consumers resumed their festive shopping during this period.

“Malaysians returned to physical stores in both commercial centres and shopping centres located throughout the country. By the last month of the year, shopping traffic returned in all major shopping malls located in Malaysia. Major shopping centres were packed with shoppers and diners,” the report said.

As for the entire year of 2021, only three retail subsectors experienced an overall positive growth in business despite recording sales contraction for some of the quarterly periods. 

They are furniture and furnishing, home improvement, electrical and electronics retailers (9.8 per cent); mini-markets, convenience stores and cooperatives (3.3 per cent); and pharmacies (0.8 per cent).

Other retail subsectors that had experienced growth in certain quarters of 2021 however recorded an overall negative performance for the whole year. 

These are namely fashion and fashion accessories retailers (-3.7 per cent); department store cum supermarket operators (-7.8 per cent); retailers of children and baby products including apparel, accessories, equipment, school uniforms and toys (-9.8 per cent); and department store operators (-11.7 per cent).

The rest, which had experienced negative performance in every quarter in 2021, marked the entire year with an overall contraction. 

They are namely supermarkets and hypermarkets (-10.4 per cent); other speciality retail stores (including photo shop, fitness equipment store, second-hand goods’ store, musical instruments store and TV shopping) at -19.5 per cent; and the personal care subsector (-37.3 per cent).

The report was based on interviews with members of the Malaysia Retailers Association (MRA) and Malaysia Retail Chain Association (MRCA) on their retail sales performance for the entire year of 2021 and their projections for the first quarter of 2022. 

Entire Malaysia is now in Phase 4 of the National Recovery Plan, and more restrictions are set to be relaxed when the country moves towards the phase of “transitioning to the endemic phase” on April 1.

In the report today, Retail Group Malaysia projects that retailers will experience a 6.3 per cent growth in sales for the year 2022.