PETALING JAYA: The shoppers are back in droves as Christmas and the New Year approach, a sign that consumer confidence has returned after the economic fallout of the Covid-19 pandemic.
Retailers and mall operators are reporting higher footfalls and larger sales volumes in shopping centres.
The shopping spree even saw a new surge in the first week of December, according to Sunway Malls CEO HC Chan.
While this could be attributed to the start of the year-end school break, Chan expects the growth to continue in the next two to three weeks.
Malaysia Retailers Association (MRA) president Andrew Lim shares his sentiment. “We have already seen an increase in both footfalls and sales,” he told FMT Business.
This festive season boom is, in fact, just an extension of a rebound that began at the end of the fourth quarter of 2021, after the Covid-19 restrictions were lifted and retailers reopened for business on Aug 16.
The extent of the recovery was obvious from the first nine months of 2022. Retail Group Malaysia managing director Tan Hai Hsin had told FMT in an earlier report that the retail sector saw a 45.9% improvement during that period compared with the same period in 2021.
By the end of last year, Chan said, sales turnover at Sunway Mall had exceeded the pre-Covid-19 level. The recovery continued over the months and he expects the overall increase in consumer traffic to reach about 15% above the pre-pandemic level by the end of this year.
“We can say that 2022 has been a year of recovery for the retail sector,” he told FMT Business.
He expects overall sales to be at least 12% higher than that achieved in 2019, the year before the pandemic sent the world into lockdown mode. That year was historically already a great year for the Sunway group.
“By now, we would have had an uninterrupted 15 months of sales that have surpassed pre-pandemic levels,” Chan said.
He said the current surge in traffic as the Christmas season approaches has been better than expected. “We have not only sustained our growth but have even surpassed previous estimates remarkably well,” he said.
He said the main sales drivers were seasonal gifts such as beauty and skincare products, perfumes, confectionery and toys.
Lim attributed the increase in sales to revenge shopping and the feel-good factor as consumers get the chance to shop again after being deprived of the chance to indulge in the year end fling for two years in a row.
Another factor, he said, is the political stability after the 15th general election. “People are more confident now about the political direction the country will take,” he said.
“People are coming out again, feeling free to actually go about their lives,” Lim said. This, he said, was the revenge shopping.
He said the strengthening of the ringgit against the US dollar in the past week was also a plus for retailers. “Since many people buy imported items for Christmas, the stronger ringgit will temper any price increase that may come with inflation,” he said.
Lim singled out IT gadgets such as smartphones and computers as the most sought after items. “Of course toys and clothes, which are usually hot items during the Christmas season, are also selling well,” he added.
Source: https://www.freemalaysiatoday.com/category/highlight/2022/12/14/festive-mood-gives-retail-industry-a-big-push/