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Retail to improve after GE 14. Means more income or more willingness?

I have bought more new shirts this year than last year but have spent virtually the same. I have bought two new pairs of jeans too. However, the amount I spent per shirt and per jeans is much lower than what I would have spent previously. For example, a new pair of very nice LC Waikiki jeans (1 Utama and IPC Mall) was only RM55 (best buy item). My previous pair of jeans was nearly twice as expensive. Actually, this is not the only thing which is happening. Set lunches which used to be RM19.90 are now coming to the RM15.90 level, even in malls. The quality may have changed slightly but this is the world we currently live in. Businesses say it’s tougher, I do agree. Let me also remind all retailers that it’s best to look at lower margins and serving more customers instead of higher margins and  fewer customers. The M40 and B20 groups in Malaysia is super huge by the way. With ever more retail choices (new brands), buyers are spoilt for choice and retailers have to fight ever harder because they are also ‘attacked’ by the online side.
This is what the Malaysia Retailers Association (MRA) president Tan Sri William Cheng said recently. “The sluggish local retail market is expected to pick up after the nation’s 14th general election which will be held on May 9. At the moment, the upcoming Malaysian general election maybe also one of the main reasons Malaysian consumers have been taking a wait-and-see attitude on their retail spending. Retail sale may rise after the official election campaign starts.”  The full article in here. (I think this is debatable but I do hope he is right because many property industry people are telling me that potential buyers are waiting to pay their downpayment only after GE. So, they are also saying that property transactions will pick up after the GETan Sri William who’s also the The Lion Group chairman also acknowledged the challenge posed by the e-commerce industry. He added, “What retailers need now is improvement in consumer spending. When the economic growth is broad-based, more Malaysians will have higher take-home pay. High income means higher purchasing power.” The full article in EdgeMarkets here for reference.  
I do hope that all these retail numbers would take into account the changing prices in the market today. When GAP left Malaysia and many other countries in this region, it was replaced by Old Navy. No prices for guessing which is the cheaper brand. Padini and Brands Outlet belong to the same owner. Again, no prices for guessing which brand is the more affordable one and are now becoming very popular. When the same piece of clothing is bought today, it meant that the actual spending is lower. If the retail can still show an increase, it meant that the market is pretty okay and not as bad as it seems. Anyway, I have no access to such numbers. Let’s see if anyone in the Malaysia Retailers Association (MRA) picks this up and does a much more comprehensive study. Yes, I am buying more often from here in Malaysia. However, I continue to visit malls every week without fail. Happy shopping everyone.
written on 29 April 2018
Next suggested article: Will the market get better? Does it even matter?

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.


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0 Responses

  1. informative article
    i read somewhere that foreign workers (now in malls) remitted billions back home
    this wage capital is the sort that is needed to lubricate the economy and provide the backbone working capital
    many feel that malls are under a twin attack of sorts ie :-
    attack A – many shoppers have gone online and online retailers got a lower cost operating a virtual store than a physical store that comes with fixed costs and overheads
    attack B – wage affordability and pricing mechanisms when many a grad is unemployed and the local malaysian has competition from foreign workers (who do not generally shop in malls)
    i find it hard to corelate how events like GE14 can determine spending albeit the well being of a sector
    economics to my mind is a science ie demand / supply and wage cost
    its mind boggling how some people in positions are pushing for a minumum wage (when there are so many foreigners offering below market wages) as wages are a by product of an economic activity (sustainability/viability)
    it beats me how a minimum wage can be forced down the throat of entreprenuers as fundamentalism is the basis of wage mechanism
    nothing personal yaar as merely expressing an opinion (and i could be wrong) as just partaking in thinking aloud/allowed in the context of the issue
    cheers bro and kudos to your tenacity of an article a day – simply awesome ???

    1. You have very good points! As for salary, it is important for employers to treat their staffs as more important people. Sharing some of the profits help too, incentives for example.

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