Business

Rahman rebuts Mydin’s claim of depleting purchasing power

Datuk Seri Abdul Rahman Dahlan

Datuk Seri Abdul Rahman Dahlan

Syndicated News
Written by Syndicated News

KUALA LUMPUR, Feb 8 2018 : Hypermarket sales cannot be viewed as the only benchmark of retail sales performance and to a large extent, the economic condition of Malaysia and its people, Minister in the Prime Minister’s Department Datuk Seri Abdul Rahman Dahlan said.

He backed his argument with Department of Statistics Malaysia’s (DOSM) data that attested the share of hypermarket sales to retail sales was only eight per cent.

The minister was rebutting Managing Director of the hypermarket and emporium chain, Mydin, Datuk Ameer Ali Mydin’s claim that despite Malaysia’s strong economic growth, Malaysians did not have enough money to spend on groceries.

“The retail trade in Malaysia has been recording strong growth both in terms of value and volume,” Abdul Rahman said in a statement here, yesterday.

In terms of value, retail trade registered a double-digit growth for three consecutive quarters in 2017 and in terms of volume, retail trade grew 7.8 per cent, 11.5 per cent and 10.4 per cent in the first, second and third quarters of 2017, respectively.

He said retail trade in the first 11 months of 2017 increased to RM410.5 billion from RM367.7 billion in the same period in 2016, a growth of 11.6 per cent.

The number of non-specialised stores, which include hypermarkets, increased from 66,920 establishments (2016) to 73,848 establishments (2017).

“This alone could be one of the reasons why some hypermarkets are facing slowing sales as consumers have more choices to shop,” he said.

Abdul Rahman said based on the Economic Census 2016 published by DOSM, e-Commerce transactions of business-to-consumer was valued at RM73.7 billion and expanding every year.

“More and more people are buying products, including basic groceries at the convenience of their own home as shopping is made easier and convenient for them through Internet,” he said.

Some of the hypermarkets in Malaysia have already started offering online grocery shopping and delivery to their customers. Those which have not ventured into the ‘trend’ yet will lose out on the potential gains that come from thriving online shopping scene.

The minister also cited domestic tourism figures as further proof that Malaysians, in general, have more money to spend.

For example, domestic tourists’ expenditure grew 10.2 per cent in 2016 to RM74.8 billion compared to RM67.7 billion in 2015, he said, adding that shopping continued to be the biggest component of domestic tourists’ expenditure with its share of 35.3 per cent.

Malaysian tourists spent RM33.5 billion abroad in 2016, an increase from RM31.1 billion in 2015 despite depreciating ringgit during the period.

“All these figures are in tandem with rising median monthly household income of 6.2 per cent per annum from RM4,585 in 2014 to RM5,228 in 2016, and soaring average monthly household expenditure of 5.9 per cent per annum from RM3,578 in 2014 to RM4,033 in 2016 reported in the Household Income and Expenditure Surveys by DOSM,” he said.

Malaysia’s strong economic growth has clearly benefited the people in terms of rising income and purchasing power which in turn boost private consumption.

Private consumption continues to be the biggest contributor to Malaysia’s economy with its share of contribution to the national gross domestic product (GDP) amounting to 53.2 per cent or RM589.7 billion.

Economic performance and condition of a country and its people cannot be measured by just one sub-sector such as the hypermarket industry alone.

“While GDP has its own limitations and may not be the perfect indicator of welfare and wellbeing of the people, it seems to correlate pretty well with broader qualitative measures of prosperity. As GDP grows, more jobs are created, household income increased and people have more money to spend,” he said. – Bernama

Comments

comments

About the author

Syndicated News

Syndicated News

News sourced from Bernama, Reuters, AFP and other accredited news agencies, including credible blogsites and news portals.