PETALING JAYA: Malaysia’s retail industry recorded a less-than-expected growth rate of 3.5% in sales for the fourth quarter of 2024 compared to the same period in 2023.
According to a survey compiled by Retail Group Malaysia (RGM) and conducted with members of the Malaysia Retailers Association (MRA) and the Malaysia Retail Chain Association (MRCA), the latest quarterly results did not meet market expectations.
MRA and MRCA members projected a fourth quarter growth rate of 4.4% in November 2024.
The survey also showed that retail prices of many goods and services continued to rise during the last quarter of 2024, with the higher cost of living having reduced the purchasing power of Malaysian consumers.
Shopping traffic in the last three months of the year was similar to 2023 levels, as the survey showed Malaysian consumers were still spending. However, holiday sales were not the same as pre-Covid levels due to the shortened school break.
MRA and MRCA noted that in 2024, the year-end school holiday was only nine days. Further, the Malaysia Year End Sale 2024 began on Nov 15 and ended on Jan 1, 2025. However, it did not stimulate more spending among Malaysians due to a lack of awareness, MRA and MRCA survey noted.
Higher tourist arrivals during the last two months of the year benefited retail businesses located in major cities, as well as tourist-oriented towns and islands.
For 2024, the survey showed that the Malaysian retail industry reported a positive growth rate of 3.8%. This final annual growth figure was slightly below market expectations. In November last year, the estimate by Retail Group Malaysia (RGM) was 3.9%.
RGM revised its annual growth rate in retail sales for 2025 to 4.3%, an upward adjustment of 0.3% from the projection made in November last year.
Similar to last year, the biggest challenge for the Malaysian retail industry in the current year is the rising cost of living as Malaysians continue to face higher retail prices on goods and services since the beginning of this year.
Higher prices were observed from groceries bought from supermarket to services such as car park charges, transport and logistics services, repair services, health care related services, media subscription services, etc.
There will be an electricity tariff hike from the second half of this year. While 85% of Malaysian households will continue to enjoy government subsidies on electricity usage, MRCA noted that businesses will incur higher operation costs due to this increment. Retail businesses are likely to pass this cost to end consumers.
For the first quarter of 2025, the Malaysian retail industry is expected to enjoy encouraging growth of 5.9% due to
the Chinese New Year festival as well as the month-long school holiday from January to February.
MRA and MRCA noted that the attractive Malaysian currency as well as the visa-free entry for visitors from China brought in large number of foreign tourists to the country during the period of Chinese New Year celebration.
The Malaysian retail industry is projected to grow by 4.8% in the second quarter, with contribution mainly from Hari Raya festival. Hari Raya Aldilfitri this year will be celebrated from the first week of April.
The retail sector in the country is anticipated to expand moderately by 2.8% during the third quarter of 2025. For the last quarter of 2025, the Malaysian retail industry is hopeful of a 3.5% growth rate compared to the same period a year ago, the MRA and MRCA survey showed.
For the first quarter of 2025, the Malaysian retail industry is expected to enjoy growth of 5.9% due to the Chinese New Year festivities as well as the month-long school holiday from January to February. – Bernama filepic
