Malaysian retail sales in the first quarter of this year rose by 2.6 per cent, a far lower rate than the 5.4 per cent expected.
But the change in government is expected to improve consumers’ confidence in the economy and in turn boost spending, according to a report by Edmund Tie & Company and Nawawi Tie Leung.
“As part of its election manifesto, the new government has zero-rated Goods and Services Tax (GST) for an interim period of three months, from June to August, en-route to abolish the widely detested levy,” the report said.
“The plan to abolish the GST is expected to positively impact the retail industry. Sales and Services Tax (SST) is being reintroduced and will likely to take effect in September with unforeseen effects.”
Looking ahead, retail sales for the second quarter are expected to expand by 6.3 per cent, in anticipation of the festive Eid season. Sales for the third and fourth quarter are expected to grow by 6.8 and 3.5 per cent respectively, according to the report’s authors. That would create an overall growth rate for this year of 5.3 per cent.
Despite the lacklustre retail sales growth, total retail stock in Malaysia’s capital Kuala Lumpur rose to 31.1 million sqft with the opening of Shoppes at the Four Season Place in May. Stock outside Kuala Lumpur remained at 31 million sqft.
Edmund Tie & Company and Nawawi Tie Leung reported that retail mall occupancy in Kuala Lumpur “lingered at 86 per cent”.
The new Four Seasons Place, located in the heart of Kuala Lumpur, is a 65-storey tower comprising a hotel, residences and retail. The retail podium comprises 200,000sqft of retail space, with department store Robinsons as anchor tenant.
Source: Inside Retail Asia.