New Report Available: Malaysia Retail Report Q3 2016

The Malaysia Retail Chain Association's (MRCA) latest assessment of the growth prospects for 2016 support our view that the country's retail sales will recover in 2016 as the initial impact of the Goods and Services Tax moderates, supported by sustained economic growth, rising household incomes and accommodative monetary policy. The national bank's view that inflation will moderate across the remainder of the year and expectations of further ringgit appreciation against the US dollar will also have the capacity to improve overall sales performance. However, the country's precipitous household debt levels still pose a downside risk to our forecasts, especially over the medium term.

Full Report Details at
- http://www.fastmr.com/prod/1182856_malaysia_retail_report_q3.aspx?afid=301

Latest Updates & Developments

Multinational agro-food company QL Resources announced in April 2016 that it had signed a 20 year franchise agreement to launch the FamilyMart convenience store brand in Malaysia. The company says it plans to open 300 stores within five years, the first of which would be operating by the end of 2016.

Lazada Malaysia announced in May 2016 that it had achieved high double-digit sales growth in 2015, although it was still losing money. Of the main e-commerce platforms operating in Malaysia, Lazada had 2.3mn downloads of its application in 2015 - more than twice that of its closest rival, 11street.

At the time of writing, the ruling Barisan Nasional (BN) looked set to win the parliamentary elections held in Malaysia's largest state Sarawak on 7 May 2016 and would be able to retain its parliamentary majority in the coalition. A BN win would be positive for the economy, enabling the government to proceed with its development plans.

Malaysia Retail Chain Association (MRCA) expects to see a significant rebound in sales for Malaysia's retailers during 2016, forecasting a 10% y-o-y increase. MRCA suggests this will be achieved as a result of growing consumer confidence having factored in the impact on household budgets of the GST, together with greater market penetration and sales by e-commerce retailers.

Malaysia's central bank, Bank Negara Malaysia (BNM), expects to see inflation moderating over the remainder of 2016 and is hopeful of further recovery in the strength of the ringgit (which appreciated by 11% against the US dollar in Q116). Ongoing improvements have the potential to increase retail sales, as import costs moderate and household purchasing power increases.

The Malaysia Retail Report has been researched at source and features BMI Research's independent assessment and forecasts for the retail sector. The report examines key drivers of retail sales growth and future prospects, including consumer spending and private sector investment.

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