The Malaysia Retailers Association (MRA) and the Malaysia Retail Chain Association (MRCA) have expressed confidence that the average growth rate in the three months to Sept 30 will expand further in line with the impressive performance in Q2.

In Q2, retail sales exceeded expectations to record an all-time high growth rate of 62.5%, according to an industry report by Retail Group Malaysia (RGM), citing input from the MRA and MRCA.

The report focused on three main factors: the Hari Raya festival, relaxation of Covid-19 SOPs and the forced shuttering of retail outlets in May and June last year.

“In the first six months of 2022, the industry expanded 39.2% over the same period a year ago,” it said.

Even sub-sectors such as department stores, hypermarkets and other specialty retail stores have recorded growth in Q2.

“MRA and MRCA project an average growth rate of 61.7% in retail sales during the third quarter of 2022,” it said.

However, RGM said the forecast made by the two retail associations was “overly optimistic”, estimating it to go up 50% instead.

“The higher-than-expected growth for the third quarter was due to large contractions during the third quarters of 2020 (-9.7%) and 2021 (-27.8%),” it said.

The contractions have left the sector with a lower base from which to grow.

The report also pointed out several issues such as staff shortage at retail outlets, the minimum wage increase to RM1,500 and the Russia-Ukraine war for the increase in prices of retail goods which consequently affect consumers’ purchasing power.

Food and beverage outlets, more specifically cafes and restaurants, recorded a growth rate of 36.3% while takeaway, kiosks and stalls climbed 35.5% in Q2.

Operators, it said, expect business to grow by 42.6% (cafes and restaurants) and 24.6% (kiosk and stalls) in Q3.