The Edge reported that the final number for 2017 showed retail sales growth is now expected to be 2.2%.
According to Retail Group Malaysia, retail sales are likely to grow by 6% in 2018, but it warned such forecast is also “highly dependent” on the general election, external economic demand and the performance of the ringgit.
The 14th general election (GE14), which has to be held the latest by August this year, is expected to be a close one between the ruling Barisan Nasional and the opposition pact of Pakatan Harapan.
A major operator of convenience stores in the country, MyNews Holdings Bhd is keeping a positive view for the retail industry, especially in the food and beverage (F&B) sector.
“When we talk about F&B, it is the most promising category in the retail line. It also shows in the statistics, with the F&B sector recording the highest growth,” MyNews chief executive officer Dang Tai Luk told the financial daily.
The company is also hoping to add 90 new outlets nationwide this year, as part of its expansion plans.
“There is still potential to grow. So yes, we believe the worst is over,” Dang was quoted as saying, adding that he expects the biggest challenge facing retailers would be the shortage of manpower.
“When you’re growing, you continuously recruit and you need to maintain workforce stability.
“However, be it high-end restaurants or supermarkets, the retail sector faces a high rate of employee turnover. Generally that’s the problem,” he said according to The Edge.
He added that local workers are not keen to join the retail sector and quit after a few months.
2017 momentum will continue
An analyst with RHB Research Institute is also very optimistic about the retail industry this year, saying it should continue where it left of in 2017.
“We expect the momentum to be sustained going into 2018 in anticipation of a pickup in consumer spending,” Soong told The Edge Financial Daily.
He cited a stable ringgit and higher tourist numbers as two key reasons for the optimism in the retail sector.
“We also think measures, such as GST relief and BR1M tabled in Budget 2018, would lend support to consumer spending and partially mitigate the impact of the rising costs of living. We do expect confidence to improve,” Soong was quoted as saying.
He added that domestic demand should continue improving as well.
“Private consumption is expected to be supported by employment gains and income, while public sector spending should be bolstered by higher revenue and expected election spending,” The Edge quoted him as saying.
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