THE Malaysia Retailers Association (MRA) is calling on the National Safety Council (NSC) to re-consider its restriction of allowing only two persons in one car during the conditional movement control order (CMCO).
“We are appealing to the NSC to allow four persons from the same household to be in one car in order to help retail businesses and F&B (food and beverage) outlets which are very badly impacted by the CMCO” it said in a statement today.
Citing the Malaysia Retail Industry Report for 2Q 2020, the association said Malaysia’s brick and mortar retailers were adversely affected as reflected in the retail sale growth rate of -20.2% for the first six months of this year compared with the same period a year ago.
While it appreciated Prime Minister Tan Sri Muhyiddin Yassin’s economic stimulus packages rolled out to assist sectors hardest hit by COVID-19 pandemic, MRA noted with the CMCO from October to Dec 6, all retail businesses and retailers were suffering as most of them were already cash-strapped from the MCO period since April 2020.
“Although businesses are allowed to remain opened as usual now, people’s movement are controlled. This is evident from the dwindling crowds at most of the Klang Valley malls since October 2020,” lamented MRA.
This results in weaker sale and has forced many retail outlets to cease operations. In October alone, the decline in sales ranged between 60% and 80% across different sub-sectors of the retail industry, it pointed out.
Compounding to the challenging operating environment is the fact that the six-month loan moratorium has come to an end in September.
The association pointed out that retailers not only have to deal with declining sales but now have to resume servicing their loans.
“Therefore, we expect more retailers to close down and many have actually shut down their stores in the last few months.
“With that we are anticipating more retrenchments and pay cuts to take place as retailers are unable to operate at full capacity as prior to COVID-19,” it remarked.
On this note, MRA is appealing to the PM for an extension and inclusion of some of the MCO stimulus packages and assistance as follows:
1) Gross turnover (GTO) rent
To assist retail businesses, sustain through these difficult times, MRA seeks the government’s intervention and urge landlords to agree to a pure GTO rent based on the principle of sharing gross profits or to give at least 50% rental rebate/discount on the gross rental.
“This will lessen the tenants’ burden and help them better manage their finances as rental is one of the main components of retailers operating cost. We do not expect retail businesses to recover any time sooner as sales has fallen beyond 60% in October.”
2) Wage subsidy programme
MRA is appealing for the wage subsidy programme be extended for another six months (until March 2021) from three months with the quantum of subsidy to be set at 50% for those earning RM4,000 and below and not limiting the number of eligible employees per company.
3) Reduction in electricity bill
MRA opined that Tenaga Nasional Bhd should step up its contribution during this entire MCO (be it EMCO, CMCO or RMCO) by providing a 50% reduction in electricity bills for a period of 12 months to help retail businesses and malls sustain their operations.
“This, would help retailers and shopping malls go a long way in managing overhead expenses,” it said.
4) Human Resource Development Fund (HRDF) levy
MRA also wants the Human Resources Ministry to extend the suspension of contribution to the mandatory HRDF levy to June 30 next year, thus supporting retail businesses facing slowdown in sales and to those facing cash flow constraints.
The current exemption on the contribution to the HRDF levy has ended on Sept 15.
5) Gradual re-opening of border restrictions
While the association acknowledges that border closure was necessary to contain and break the chain of COVID-19 infection, it says closing the borders for too long will have severe economic impetus towards international trade, tourism and education that will result in adverse economic challenges to the nation.
“Therefore, acceleration of reciprocal arrangement to reopen border with our neighbouring green zone countries for some form of business and leisure travel is imperative while having to be cautious and take calculated risks.”
6) Loan moratorium
MRA is urging Bank Negara Malaysia (BNM) to extend the six-month loans repayment moratorium that has ended in September 2020 for another six months to prevent more job losses and companies going out of business.
“These are not normal times. Therefore, instead of leaving it to the individual banks to work out mutual arrangements with borrowers, BNM should intervene and broker a general consensus among lenders to extend the loan moratorium as was done before.”
The association also assured its members that it will continue to engage with the relevant government agencies in tackling retail issues and challenges arising from this unprecedented pandemic. – Nov 11, 2020
