MRCA: Retail sector to improve this year, surpassing growth in 2023

KUALA LUMPUR: The Malaysian retail sector is expected to improve this year, surpassing the industry’s growth in 2023, driven by government support, positive economic indicators and an influx of tourists.

Malaysia Retail Chain Association (MRCA) president Datuk Ken Phua said the retail sector showed growth of 7.8% in the first quarter of this year.

“We estimate the growth rate to remain stable and perform better than last year,” he told SunBiz on the sidelines of Franchise Expo Malaysia 2024 (FEM 2024) organised by MRCA today.

Referring to trade data, Phua said the trade surplus is healthy, with the highest recorded from January to May. “So, it’s very encouraging for us to see that for 49 consecutive terms, we have experienced the largest increase in our trade surplus.”

This optimism is based on an 8.7% growth in trade to RM1.158 trillion compared to the corresponding period last year, with exports increasing by 4.5% to RM605.25 billion and a trade surplus of RM52.01 billion.

Phua mentioned that the government has made efforts to support various sectors, not just retail.

He said the forecast gross domestic product growth of between 4.5% and 5% this year will also drive the retail sector’s growth. “Our stable interest rates are also expected to stimulate the economy.”

Phua expressed excitement about the boost from inbound tourism. “Last year, we welcomed about 20 million tourists, and I believe we can expect an even larger influx this year,” he said.

FEM 2024, now in its seventh edition since its inception in 2016, is expected to attract more than 15,000 visitors.

Themed “Invest In The Future,“ the event highlights the synergy between technological innovation and entrepreneurial excellence.

The expo features over 400 booths showcasing franchise opportunities across various sectors. This year’s event sees participation from master franchisors from more than 10 markets, including China, Singapore, Indonesia, and Taiwan.

Phua said that this year’s franchise expo has achieved the highest level of participation ever seen. He anticipated the total value of transactions during the three-day event would exceed the initial estimation of RM120 million.

Meanwhile, Malaysia External Trade Development Corporation senior director of strategic planning Raja Badrulnizam Raja Kamalzaman emphasised the role of retailers and franchisees in the economy’s development.

He also highlighted the retail industry’s potential to boost tourism during Visit Malaysia 2026, aiming to attract 35.6 million tourists and generate RM147.1 billion in revenue in collaboration with the Madani government.

“By collaborating closely, these sectors can create a seamless and enriching experience for tourists,” he said.