Distributive trade sales contracted for the fourth consecutive month in January (-2.7% YoY; Dec: -0.3%) as consumer demand weakened amid the reimplementation of Movement Control Order (MCO 2.0) on 13th Jan
Sales value (RM111.7b; Dec: RM115.5b): fell 3.3% MoM (Dec:4.6%), its sharpest since April 2020 but remained above pre pandemic level (Feb: RM109.0b) as freedom of movement were restricted and retailers were only allowed to operate for limited hours.
The decline was due to the fall in motor vehicle sales and retail trade, though it was partially mitigated by a softer contraction in wholesale trade
Motor vehicles (-13.8%; Dec: 7.4%): plunged and returned to a contraction after six months of growth on the back of a significant drop in sales of motor vehicles (-17.6%; Dec: 15.3%) due to a decline in footfalls in automobile showrooms and lower stock levels after December’s car-buying spree.
Retail trade (-2.5%; Dec: -2.0%): fell further due to a weak sale of others in specialised store (-7.0%; Dec: -6.4%) and automotive fuel (-14.1%; Dec: -10.5%).
Wholesale trade (-0.4%; Dec: -0.6%): contraction narrowed further, driven by higher sales of household goods (4.2%; Dec: 3.9%).
Mixed retail trade performance across advanced economies
US: climbed sharply to 6.1% (Dec: 0.8%), its largest gain since December 2019 as households received additional pandemic relief money from the government.
UK: fell to its lowest in eight months (-5.9%; Dec: 3.1%) as non-essential stores across the UK were forced to close as part of the third national lockdown measures.
2021 distributive trade sales forecast retained at 8.0-10.0% (2020: -5.9%) due to the easing of COVID-19 restrictions and vaccine rollouts
Retail sales growth is projected to be negative in 1Q21 due to the MCO 2.0 measures, however, we may see a steep recovery from 2Q21 onwards on the lower base impact and the return to the more lenient Conditional MCO and Recovery MCO starting from 5th March. In addition, Malaysia’s vaccination drive is seen to boost domestic retail industry in 2021.
As such, value-added private consumption growth is projected to register a softer contraction in 1Q21 (-3.1%; 4Q20: -4.3%), with the 1Q21 GDP expected to register a smaller contraction of 1.3% (4Q20: -3.4%).
New IPO: The onshore and offshore support services provider for the O&G industry, Steel Hawk Bhd aims to list on the Ace Market!
MQ Trader 5201 views | 5 d ago
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New IPO: The largest mini-market player and a leading groceries retailer in Malaysia, 99 Speed Mart Retail Holdings Bhd aims to list on the Main Market!
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