Malaysia Retail Report Q1 2016

Malaysia Retail Report Q1 2016

BMI View

: The retail market will begin to bounce back in 2016 after a rough year during 2015,characterised by the weak ringgit, removal of subsidies and the lowest consumer confidence levels seen in10 years. The short-term outlook is bearish and we expect that it will take a number of years to alterspending habits away from saving and paying down high levels of consumer debt, back towards retailspending.As a highly oil & gas dependent country, Malaysia has been hit by the changing oil price landscape in 2015.Fossil fuels directly contribute to 30% of all government revenues in Malaysia and a 40% drop in oil pricein 12 months requires the country to rebalance its budget. First, fuel subsidies were removed allowing petrolprice to rise. Consumers and businesses are facing higher transportation costs, and due to inelastic nature ofdemand for petrol, Malaysians will see their disposable incomes decline in 2015-2016. Second, thegovernment moved further in rebalancing the budget and introduced a Goods and Services Tax (GST) inApril 2015.

Most of the retail products qualify for the new 6% tax which is in turn squeezing profit marginsfor retailers and decreasing the purchasing power of Malaysian wages. As a result, consumer sentiment fellto a six-year low in July 2015, according to the Malaysian Institute of Economic Research. The holy monthof Ramadan, which typically generates large volumes of sales as stores launch promotions in order to attractcustomers, was disappointing for retailers, some of whom faced 20% declines in sales compared with lastyear. Consequently, we forecast that total household spending will have fallen by 5.2% in US dollar termsby the end of 2015.
BMI Industry View 7
Political 12
Economic 14
Industry Forecast 16
Headline Retail Forecast 16
Table: Total Household Spending (Malaysia 2012-2019) 18
Table: Retail Sector Spending, % Of Total (Malaysia 2012-2019) 19
Table: Headline Retail Sector Spending (Malaysia 2012-2019) 20
Table: Retail Sector Spending, % of GDP (Malaysia 2012-2019) 24
Retail Sector Forecast 25
Food, Drink & Tobacco 28
Table: Food, Drink & Tobacco Spending (Malaysia 2012-2019) 28
Clothing & Footwear 29
Table: Clothing & Footwear Spending (Malaysia 2012-2019) 30
Household Goods 30
Table: Household Goods Spending (Malaysia 2012-2019) 31
Personal Care 32
Table: Personal Care Spending (Malaysia 2012-2019) 32
Household Numbers And Income Forecast 33
Table: Household Income Data (Malaysia 2012-2019) 34
Demographic Forecast 37
Table: Total Population (Malaysia 2012-2019) 39
Table: Population: Babies (Malaysia 2012-2019) 40
Table: Population: Young Children (Malaysia 2012-2019) 40
Table: Population: Children (Malaysia 2012-2019) 40
Table: Population: Young Teens and Older Children (Malaysia 2012-2019) 41
Table: Population: Young People (Malaysia 2012-2019) 41
Table: Population: Older Teenagers (Malaysia 2012-2019) 41
Table: Population: 21yrs + (Malaysia 2012-2019) 42
Table: Population: Young Adults (Malaysia 2012-2019) 42
Table: Population: Middle Aged (Malaysia 2012-2019) 42
Table: Population: Urban (Malaysia 2012-2019) 43
Macroeconomic Forecasts 44
Economic Analysis 44
Table: Economic Activity (Malaysia 2010-2019) 48
Industry Risk Reward Index 49
Asia Risk/Reward Index 49
Table: Asia Pacific Retail Risk/Reward Index, Q116 49
Malaysia Risk/Reward Index 50
Rewards 50
Risks 51
Market Overview 53
Competitive Landscape 57
Department Store Groups 57
Mass Grocery Retail 58
Fashion 59
Consumer Electronics 60
Glossary 61
Methodology 68
Industry Forecast Methodology 68
Sources 71
Risk/Reward Index Methodology 71
Table: Retail Risk/Reward Index Indicators 72
Table: Weighting Of Indicators 74

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