Cannibalisation among retail outlets, rising e-commerce might cause lower retail sales

KUALA LUMPUR: Cannibalisation among retail outlets as well as the increase in the number of e-commerce platforms could be the reasons affecting the performance of the retail market, said Second Finance Minister Datuk Seri Johari Abdul Ghani.

Previously, Retail Group Malaysia (RGM) raised its concern on the sales and consumer spending, which did not reflect the strong 6.2 per cent gross domestic product growth registered in the third quarter of 2017.

RGM, which recently released the Malaysia Retail Industry Report for November 2017, has revised its retail sales growth for this year for the third time, to 2.2 per cent from 3.7 per cent projected earlier.

Johari said the recent data on retail sales growth might not be accurate as the measures were centred on shopping malls and retail chain and possibly excluded the other factors.

“One of the factors that led to the lower growth registered by the retail segment was due to cannibalisation of retail outlets because of the oversupply of shopping malls.

“When you have oversupply of shopping malls and everyone ( retailers) got diluted thus everyone will make noise because of the ( growth) numbers, but actually the numbers are dispersed (among shopping channels),” he said after witnessing the signing of Memorandum of Understanding ( MoU) between Eco World International Bhd and UKbased Be Living Holdings Ltd yesterday.

“The government will analyse the e-commerce factor affecting the retail segment. However, the total is still registering a decent growth,” Johari said.

On the expensive consumer goods, he said, the government was controlling the basic necessities and unable to simply intervene in the supply and demand chain.

“We cannot simply intervene … identify one by one of the items that are expensive. The items that we cannot control the price, we will increase the (goods) supply to push the price down.

“Consumer groups that think that the items are expensive, they can always report to us and then we analyse them. If these items are beyond the government’s controls, then we will come in and look at how we can increase the supply … be it through imports or alternative supply,” he said.

Meanwhile, on the likelihood of revising the Goods and Services Tax ( GST) rate due to higher growth estimate by World Bank, he said, the Ministry of Finance has not considered it.

Instead, the ministry remained focus on improving the tax’s compliance among businesses, he said.

“We want the compliance rate to increase and not the rate. For instance, the Philippines started with lower tax rate and over time, its rate stood at 12 per cent whereas the compliance rate is still relatively low.

“We don’t want more and more people refusing to comply as they are no longer competitive and we also do not want to see some businesses comply to GST while others not, thus it is hard to put them in the same playing field,” he said. — Bernama THE Kuala Lumpur Tin Market (KLTM) closed US$70 lower at US$18,900 per tonne yesterday despite the uptrend on the benchmark London Metal Exchange (LME), a dealer said.

Tin price on the LME increased by US$75 to US$18,900 per tonne.