No ‘ retail crisis’

> Minister says closure of some hypermarkets to streamline operations

PUTRAJAYA: The decision taken by GCH Retail Malaysia to close down five of its hypermarkets in the country was purely for economic reasons, said Domestic Trade, Cooperatives and Consumerism Minister, Datuk Seri Hamzah Zainudin.

Dismissing calls that the country is suffering from a “retail crisis”, he said the decision to close down any branch of a hypermarket is down to proprietors as it sees fit in an effort to streamline and increase profit from their operations.

“We must understand that every business has its risks. Most companies will study the risks along with its expected competition. As such, there are always various factors including rental and consumer marketability.

“When the Tesco hypermarket sold its chain in South Korea recently, was it because the country is going bankrupt?” he asked after officiating the ministry’s monthly meeting yesterday.

At present, he said the country has 51 foreign-owned hypermarkets and 71 superstores.

He said GCH Retail had informed the ministry of its decision to close some premises as they are in the midst of negotiating smaller rental spaces.

“They are looking to reduce the size of their premises due to an increase of demand in e-commerce where more consumers are prone to making their purchases online.”

Despite the closure, Zainudin expressed hope that the welfare of the workers affected will be taken care of by GCH Retail.

His comments came after GCH Retail announced that five of its hypermarkets – Sri Manjung, Sungai Petani, Shah Alam City Centre Mall, Sibu and Selayang Lama – will shut down on Nov 5, following a decision not to extend their leasing contracts.