Hypermarket sales not benchmark of Malaysian economic condition

Hypermarket sales not benchmark of Malaysian economic condition

KUALA LUMPUR: Hypermarket sales cannot be viewed as the only benchmark to gauge the economic condition of Malaysia and its people, Minister in Prime Minister’s Department (Economic Planning Unit) Datuk Seri Abdul Rahman Dahlan said.

He said this was especially so as data provided by the Department of Statistics showed that the share of hypermarket sales to retail sales was only 8 per cent.

“Even so, retail trade in Malaysia has been recording a strong growth both in term of value and volume.

“In term of value, retail trade registered double digit growth for three consecutive quarters in 2017 and in term of volume, retail trade grew by 7.8 per cent, 11.5 per cent and 10.4 per cent in the first, second and third quarter of 2017 respectively,” he said.

Rahman said retail trade in the first 11 months of 2017 increased to RM410.5 billion from RM367.7 billion in the same period for 2016, marking a growth of 11.6 per cent.

“The number of non-specialized stores which include hypermarkets, increased from 66,920 establishments (2016) to 73,848 establishments (2017).

“This alone could be one of the reasons why some hypermarkets are facing slowing sales as consumers have more choices to shop,” he said in a statement today.

The statement was issued in response to a news report on the comments made by the managing director of Mydin retail chain that despite Malaysia’s strong economic growth, the people didn’t have money to spend and this was evidenced by the continued contraction of hypermarket sales.

Rahman said based on the Economic Census 2016 published by DOSM, e-Commerce transactions of business-to-consumer (B2C), valued at RM73.7 billion was expanding every year.

He said more people were buying products including basic groceries at the convenience of their own home as shopping was made easier and convenient for them through internet.

“Some of the hypermarkets in Malaysia have already started to offer online grocery shopping and delivery to their customers.

“hose which have not ventured into the “trend” yet will lose out on the potential gains that come from thriving online shopping scene,” he said.

Rahman said other figures indicated that Malaysians in general had more money to spend.

Citing domestic tourists’ expenditure, he said it grew by 10.2 per cent in 2016 to register RM74.8 billion compared to RM67.7 billion in 2015.

He said shopping continued to be the biggest component of domestic tourists’ expenditure with its share of 35.3 per cent.

Rahman added that Malaysian tourists spent RM33.5 billion abroad in 2016, an increase from RM31.1 billion in 2015 despite depreciating Ringgit during the said period.

“All these figures are in tandem with rising median monthly household income of 6.2 per cent per annum from RM4,585 in 2014 to RM5,228 in 2016 and soaring average monthly household expenditure of 5.9 per cent per annum from RM3,578 in 2014 to RM4,033 in 2016 reported in the Household Income and Expenditure Surveys by DOSM.

“Malaysia’s strong economic growth has clearly benefited the people in term of rising income and purchasing power which in turn boost private consumption,” he said, adding private consumption continued to be the biggest contributor to Malaysia’s economy with its share of contribution to the national GDP amounting to 53.2 per cent or RM589.7 billion.

Rahman said economic performance and condition of a country and its people cannot be measured by just one sub-sector such as hypermarket industry alone and that while GDP had its own limitations and may not be the perfect indicator of welfare and wellbeing of the people, it does seem to correlate pretty well with broader qualitative measures of prosperity.

“As GDP grows, more jobs are created, household income increased and people have more money to spend,” he said

NST