Retail sector to improve this year, outpacing growth in 2023

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

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

“We estimate that the growth rate will remain stable and we will achieve better results than last year,” he said. SunBiz on the sidelines of Franchise Expo Malaysia 2024 (FEM 2024) organised today by MRCA.

Referring to trade data, Phua said the trade surplus is healthy, with the highest recorded from January to May. “We are therefore very pleased that we have recorded the largest increase in the trade surplus for 49 consecutive periods.”

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

Phua mentioned that the government is making efforts to support various sectors, not just retail.

He said a projected 4.5% to 5% increase in gross domestic product this year would also drive growth in the retail sector. “Our stable interest rates are also expected to stimulate the economy.”

Phua expressed excitement about the increase in inbound tourism. “Last year, we welcomed about 20 million tourists and I think we can expect an even bigger influx this year,” he said.

FEM 2024, taking place for the seventh time since its inception in 2016, is expecting more than 15,000 visitors.

The event, entitled “Invest in the Future”, highlights the synergy between technological innovation and entrepreneurial excellence.

The expo features over 400 booths showcasing franchise opportunities across a range of sectors. This year’s event features major franchisors from over 10 markets, including China, Singapore, Indonesia and Taiwan.

Phua said this year’s franchise expo had seen the highest level of participation ever seen. He predicted that the total transaction value during the three-day event would exceed the initial estimate of RM120 million.

Meanwhile, Senior Director of Strategic Planning at Malaysian Foreign Trade Development Corporation Raja Badrulnizam Raja Kamalzaman emphasised the role of retailers and franchisees in the development of the economy.

He also highlighted the retail industry’s potential to boost tourism during the Visit Malaysia 2026 initiative, which aims to attract 35.6 million tourists and generate revenue of 147.1 billion Malaysian ringgit in partnership with the Madani government.

“By working closely together, these sectors can create a coherent and enriching experience for tourists,” he said.