I read something which I fully expected. The retail sales are expected to slow down for 6 months, beginning April. According to Retail Group Malaysia (RGM), which tabulates quarterly retail data, the reason for this slow down is because consumers are more cautious and taking a “wait-and-see” approach due to the implementation of the Goods and Services Tax (GST). Of course, in actual percentage, it expects the second quarter of 2015 to still show a growth of 3.5%. It however expected Malaysian consumers to start buying again in three months time and by the final quarter, Malaysian consumers would already gotten used to the GST. By then retail spending would return to normal. Overall, the industry is expected to recover strongly with a 6.9% growth rate.
I have no such statistics but I can safely tell you that the older models of smartphones that many are using would somehow have to be replaced with the newer models. Besides that, I still see many people in Starbucks even until today despite GST being charged on every cup of coffee there. SOGO which is always packed is still packed and the sales is continuing. I just came back from SOGO today and have bought a new pair of comfortable sandals for my mother. Last week I bought a new handbag for my wife in Setia City Mall after a dinner in a Japanese restaurant. I can safely say that because the employment market remains healthy, any negative sentiment is likely to be short-term. Just look at the developed nations, materialism is the norm and no one is going to stop spending so that they can save money for their retirement. Not many would be worried when they are still below 35…..
One thing I noted though is that everyone would talk about GST every day. The sentiment remains negative. Many kept saying that the prices of goods have gone up but I can safely say that when I paid for my groceries, I have not really felt the effect. Maybe because I also switch some brands as well as buying only when that certain product has special offers. So, I think the worst GST on me remain to be my faithful trip to Starbucks. I hope another huge chain may just open and give more competition. Truth is, their margin is way HIGHER than the GST but there’s no competition, thus the prices would usually inch upwards. Happy buying.
written on 11 May 2015
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