KUALA LUMPUR: Malaysia's retail sales rebounded in the first quarter of 2024, bolstered by the Chinese New Year festival and the month-long school holiday, but growth may slowdown in the next three months, said Retail Group Malaysia (RGM).
Retail sales grew 7.8 per cent in the January to March 2024 period when compared to the same period in 2023, as most subsectors notched a turnaround led by fashion and department store-cum-supermarket.
In the October–December period, retail sales declined 0.2 per cent year-on-year.
Festive sales during Hari Raya Aidilfitri, which began in the second week of April, were "not encouraging and below market expectations," RGM said.
Ramadan in 2024 began on March 12, which partly contributed to higher retail sales during the first quarter, RGM said in a statement.
"The attractive ringgit and the visa-free entry for visitors from China brought a large number of foreign tourists to the country during the period of Chinese New Year," it said.
Retail prices, especially food prices, continued to rise during the first quarter of 2024.
The higher cost of living had a negative impact on the purchasing power of Malaysian consumers.
Members of the Malaysia Retailers Association and the Malaysia Retail Chain Association projected an average growth of 1.7 per cent during the second quarter of 2024, it noted.
"Hari Raya Aldilfitri this year was celebrated in the second week of April. The festive sale was not encouraging, and it was below market expectations.
"The department store and supermarket operators are expecting their business to expand by 0.6 per cent only in the second quarter of this year," said the independent retail research firm.
RGM said department store operators are expecting their businesses to decline by 16.4 per cent for the second 3-month period of this year, making it the worst retail sales forecast for the quarter.
Similarly, supermarket and hypermarket operators are not optimistic about their sales during the second quarter of 2024, expecting growth of only 1.4 per cent for the quarter.
The operators of mini-markets, convenience stores, and cooperatives are anticipating that their growth rate will remain at 5.7 per cent during the second three months of this year.
Retailers in the fashion and fashion accessories sector expect their businesses to gain by 6.7 per cent in terms of growth rate during the second quarter of 2024, as compared to the same period a year ago.
Retailers selling children and baby products predict its retail growth rate to moderate at 3.1 per cent during the second 3-month period of this year, added RGM.