DRIVEN by continued global uncertainties spanning from a potential escalation of the Russia-Ukraine conflict, tension in the Taiwan Straits and a prolonged sell-down in most global bourses, Malaysian retailers are bracing for a difficult year ahead.
This insight follows two recent surveys by the Small & Medium Enterprises Association Malaysia (SAMENTA) – (i) a Mid-Term State of the SMEs Survey in July in partnership with Affin Bank and (ii) a September survey on Retail Outlook and Predictions 2023.
“Our retail sector is seeing a rapid recovery since the re-opening of the economy. In August, for example, sales value climbed year-on-year by 34.5% to RM57 bil. Almost everyone surveyed are bullish about the rest of 2022,” revealed SAMENTA’s chairman Datuk William Ng at a SAMENTA Retail Outlook Forum in Petaling Jaya which involved over 50 SME retailers and food & beverage (F&B) operators.
“However, when asked about prospects for 2023, most respondents were far less optimistic with two out of three retailers expecting a drop in both sales value and volume. This is primarily driven by political and economic uncertainty, increase in the overnight policy rate (OPR) and normalisation of ‘revenge shopping’ post-pandemic.”
He added: “Our retailers, especially the SMEs, are facing a quadruple whammy of downward pressure on sales, slower than larger firms’ recovery, a rapid increase in costs and severe shortage of workers. This is not only hampering growth and recovery but is debilitating to our quest to have vibrant retail sector as one of the cornerstones of our economy.”
To address such concerns, Ng explained that SAMENTA is working with the Government including the Malaysia Productivity Corporation (MPC) and Malaysia Digital Economy Corporation (MDEC) to support affected SME retailers to digitalise, improve their productivity and cushion their labour and costs issues.
One of the initiatives is the SME Digital Transformation and Productivity Programme launched in partnership with MPC to transform 1,000 SME retailers into digital-ready and digital-first businesses.
“Typically, we will prefer if businesses are left alone – to compete fairly. But these are unusual times, and we will need quick government intervention to rebuild consumer (and trade) confidence, contain costs pressure and ease the labour crunch,” Ng pointed out.
Formed in 1986, SAMENTA is Malaysia’s oldest and largest association for small and medium enterprises. – Oct 28, 2022
