KUALA LUMPUR, July 9 — At least 200,000 small businesses that could not operate during the movement control order (MCO) are now facing an uncertain future.
About 90 per cent of these were stall-based businesses, according to a report in The Malaysian Reserve.
Retail Group Malaysia (RGM) managing director Tan Hai Hsin said in the report he was uncertain if these businesses which represent 61 per cent of total retail outlets and 63 per cent of retail sales in the country have resumed business or closed permanently.
“There are many (that were closed permanently), but we can’t establish a number. (It is) difficult to establish the figure at the moment.
“Malaysian consumers did not rush to buy non-essential goods when shops reopened. We did not get a V-shape recovery. We are now going through a U-shape recovery,” he was quoted saying.
He also said it will take longer for retail spending to return to pre-Covid-19 levels because foreign tourists are still not allowed to enter Malaysia under an ongoing travel ban imposed by the government.
Based on RGM’s figures, non-essential retailers were looking at a total operating cost of RM14.3 billion while their outlets remained closed.
The expenditure includes rent, staff cost, utilities, insurance, taxes, advertising and promotional expenses, repair and maintenance costs and third-party professional services.
According to RGM, it also foresees the industry suffering a decline in sales of 9.3 per cent in the second quarter of 2020 (2Q20).
“For 1Q20, the group forecast a negative growth of 18.8 per cent year-on-year. This projection takes into consideration the four weeks of MCO in April, as well as the lower than usual sale numbers during the Hari Raya Aidilfitri festival.
“As for 3Q20 and 4Q20, the retail industry is expected to grow by 2.5 per cent and 3.3 per cent respectively,” it said, adding that Malaysia’s overall retail industry is expected to suffer a decline in sales of 5.5 per cent compared to last year.
Related Articles Hong Kong to suspend all schools due to spike in coronavirus cases Vietnam says 31 million workers impacted by pandemic, risk of rising unemployment Japan urges nightclubs to act to stem coronavirus spikes