PETALING JAYA: Retail Group Malaysia (RGM) says the sector recorded “poorer-than-expected” growth in the third quarter of 2020, contracting by 9.7% compared with the same period in 2019.
“This latest quarterly result was way below market expectation,” it said in a report.
It said members of the Malaysian Retailers Association had projected a third quarter growth rate of -3.4%.
“This latest result was 185% worse than the earlier estimate,” said RGM, attributing this to several factors, including shoppers still being wary of Covid-19.
“They travelled to retail shops for the basic necessities and chose not to shop around.”
It also cited pay cuts, which reduced the purchasing power of consumers, noting that retail sales growth contracted by 18.4% for the first nine months of 2020 compared with the corresponding period in 2019.
With the exception of specialty retail stores, including television shopping channels and those selling photography, toys, second-hand, optical and children’s goods, all other retail subsectors saw declining sales in the third quarter.
Even supermarkets and hypermarkets were affected, with sales dropping by 15.1%, worse than the first two quarters of 2020.
“Members of the retailers’ association are still pessimistic about their businesses in the next three months and estimate an average growth rate of -15.1% during the fourth quarter of 2020,” it said.
RGM said it was also revising its retail growth rate for the fourth quarter downwards further to -18.2% because of the prolonged conditional movement control order.
It said it estimates the retail growth rate will contract to -15.8% for the whole of the year.
For the coming year, RGM is projecting a growth rate of 4.9%