In the second quarter of 2024, Malaysia's retail sales declined significantly with only growing by 0.6%, according to Kumpulan Runcit Malaysia (RGM).
This figure was well below the 1.7% projection, marking a 65% shortfall from expectations.
The weaker performance was due to rising costs of living, cautious consumer spending, and global challenges such as the ongoing Israeli-Palestinian conflict, which impacted certain international brands.
Despite an increase in foreign tourists due to a favorable ringgit and visa-free entry for visitors from China and India, festive sales during Hari Raya Aidilfitri were also lackluster.
Looking ahead, Malaysian retailers remain optimistic about the third quarter, forecasting average growth of 3.6%.
Sectors such as department stores, supermarkets and fashion are expected to see significant growth.
However, ongoing challenges such as rising living standards, rise in service tax and floating diesel prices continue to weigh on spending.
Nevertheless, government initiatives, including civil servant pay rises and tourism efforts, are expected to support retail recovery in the coming months.
