Roller-coaster ride for retailers in 2009 amid global crisis

 

THE retail industry endured a roller-coaster ride in 2009.

Barely a month after retailers projected sales for the year to improve by as much as 3 per cent, they have now reverted to an earlier forecast of flat growth in 2009.

The year did not start on a bright note as a global recession started to affect the Malaysian economy. Sales contracted in the first quarter. Although many expected sales to fall in the second quarter, retailers were pleasantly surprised to chalk up growth.

Buoyed by this showing, they expected to fare well in the third quarter and then enjoy a robust fourth quarter.

But several events in the third quarter hurt sales.

"After a negative growth in the first quarter, the second-quarter retail sales were better, but the first-half growth remained flat," Malaysia Retailer Association president Eddy Chan said in an interview with Business Times recently..

Chan said sales in the July-September 2009 period were severely hit. This was at the height of the Influenza A H1N1 pandemic in July and August.

The August 1 rally on the Internal Security Act review as well as a toned-down Merdeka celebration added to retailers' woes as consumers opted to stay home.

This resulted in a dismal August 2009 Mega Sales Carnival.

Nevertheless, in the current October-December quarter, retailers are expecting sales to rebound due to festive and back-to-school shopping seasons.

In 2009, retailers who had been worst hit were those located in Penang and Johor compared to those within the Klang Valley and the east coast.

Sales in Johor, for example, were affected due to job losses. The H1N1 further dragged down sales as Singaporeans stayed away from Malaysia during the H1N1 pandemic. Johor depends a lot on Singaporean shoppers.

Meanwhile, Chan said Tourism Malaysia's move to revert to the YES (Year End Sales) from Malaysia Savings Sales is a move in the right direction to promote the event.

Annually, three major sales events are held - The Grand Prix Sale in March, The Mega Sale Carnival in August and the Year End Sale in December.