Explaining that the country’s strong economic growth has clearly benefited the people in terms of rising income and purchasing power, the minister in charge of the Economic Planning Unit (EPU) said the hypermarket boss was wrong in his assumptions.
“The economic performance and condition of a country and its people cannot be measured by just one sub-sector, such as the hypermarket industry, alone.
“This is evident from the fact that private consumption continued to be the biggest contributor to Malaysia’s economy.
“Its share of contribution to the national GDP amounted to 53.2% or RM589.7 billion,” Rahman said in a statement today.
He was referring to Ameer Ali’s comments, in a radio interview, on how the hypermarket chain had suffered losses amounting to RM100 million by taking part in the government’s KR1M project.
“Consumers don’t seem to have enough money to spend on groceries,” the Mydin boss said, adding that this could be noticed as hypermarket sales have been declining.
“For domestic consumption, they are basic goods. But hypermarkets and supermarkets in Malaysia, which control 50% of the grocery market, have registered negative growth.
“I think people just don’t have the money,” Ameer said.
According to Rahman, one possible contributor to such a scenario was that the number of non-specialised stores had increased from 66,920 in 2016 to 73,848 last year.
“This alone could be one of the reasons why some hypermarkets are facing slowing sales as consumers have more places to shop.
“Besides that, based on data provided by the Statistics Department, the share of hypermarket sales to retail sales is only 8%.
“So, hypermarket sales cannot be viewed as the only benchmark of retail sales performance and, to a large extent, the economic conditions of Malaysia and the people,” Rahman said.
He added that retail trade in Malaysia had been recording strong growth, both in terms of value and volume.
“In terms of value, retail trade registered double-digit growth for three consecutive quarters in 2017.
“In terms of volume, retail trade grew by 7.8% in the first quarter of 2017, 11.5% in the second quarter and 10.4% in the third quarter.
“Retail trade in the first 11 months of 2017 increased to RM410.5 billion from RM367.7 billion in the same period for 2016 — a growth of 11.6%.”
Online grocery shopping catching up
According to Rahman, the convenience of shopping online has also contributed to people not going to hypermarkets and supermarkets as much as they did before.
“More and more people are buying products, including basic groceries, from the convenience of their own homes as shopping is made easier for them through the internet.
“Some of the hypermarkets in Malaysia have already started to offer online grocery shopping and delivery to their customers.
“Those that have not ventured into the ‘trend’ yet will lose out on the potential gains that come from the thriving online shopping scene.”