Malaysia Retail Industry Report

(March 2025)
Compiled and Written by Retail Group Malaysia
PREAMBLE
TABLE 2: COMPARISON OF RETAIL SALES WITH
Members of Malaysia Retailers Association OTHER ECONOMIC INDICATORS, 2024
(MRA) and Malaysia Retail Chain Economic Indicator 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
Association (MRCA) were interviewed on GDP (%) 4.2 5.9 5.3 5.0
their retail sales performances for the entire Inflation rate (%) 1.7 1.9 1.9 1.8
year of 2024 and the first quarter of 2025.
Private consumption (%) 4.7 6.0 4.8 4.9
Retail sales (%) 7.8 0.6 3.8 3.5
This is the 28th anniversary of Malaysia
Consumer Sentiment Index 87.1 NA NA NA
Retail Industry Report. It is the longest-
running retail industry survey in Malaysia. Unemployment rate (%) 3.3 3.3 3.2 3.2
Source: Bank Negara/ Department of Statistics/ MIER/
Retail Group Malaysia
LATEST RETAIL PERFORMANCE

For the fourth quarter of 2024, Malaysia retail industry COMPARISON OF RETAIL SALES WITH OTHER
recorded a less-than-expected growth rate of 3.5% in retail ECONOMIC INDICATORS
sales, as compared to the same period in 2023 (Table 1).
For the fourth quarter of 2024, Malaysia national economy
This latest quarterly result did not meet market expectation. reported a growth rate of 5.0% (Table 2, at constant prices), as
Members of MRA and MRCA projected the fourth quarter compared to 3.5% for retail sales (at current prices).
growth rate at 4.4% in November 2024.
This quarterly growth rate was supported mainly by domestic
TABLE 1: YEAR ON YEAR PERCENTAGE CHANGE demand. Private and public investment activities enjoyed
IN RETAIL SALES (WEIGHTED), 2023/24 strong growth rates of 12.7% and 10.0% respectively. Net
Type Period % Growth export grew by 57.6% due mainly to moderation in capital and
Retail sales Oct-Dec 2023 -0.2 intermediate imports.
Jan-Mar 2024 7.8
Services sector supported the economic activity during the
Apr-Jun 2024 0.6
fourth quarter. For the same period, construction sector enjoyed
Jul-Sep 2024 3.8
double-digit growth rate of 20.7%.
Oct-Dec 2024 3.5
Jan-Dec 2024 3.8 For the whole year, Malaysia real GDP expanded by 5.1%. In
Source: MRA/ MRCA/ Retail Group Malaysia 2024, Malaysian economy was driven by sustainable domestic
demand and strong recovery in export market.
Retail prices of many goods and services continued to rise
during the last quarter of 2024. Higher cost of living had The average inflation rate during the fourth quarter of 2024
reduced the purchasing power of Malaysian consumers. slowed down further to 1.8%. The slower pace of growth was
attributed to lower average price of RON97 as well as cheaper
The shopping traffic for the last 3 months of the year was rates on Information & Communication services. On the other
similar to 2023 level. Malaysian consumers were still spending. hand, higher prices were reported in Personal Care, Social
However, the holiday sales were not the same as pre-covid Protection & Miscellaneous Goods & Services; Restaurants &
level due to the shortened school holiday. For 2024, the year- Accommodation Services; Housing, Water, Electricity, Gas &
end school holiday was only 9 days. Other Fuels as well as Food & Non-Alcoholic Beverages.

The Malaysia Year End Sale 2024 (MYES 2024) began from For the year 2024, inflation rate increased at a slower pace at
15 November 2024 and it ended on 1 January 2025. However, 1.8% as compared to 2.5% for the same period in 2023. The
it did not stimulate more spending among Malaysians due to average price of Restaurants & Accommodation Services
lack of awareness. registered the highest increase with 3.1%.

Higher tourist arrival during the last 2 months of the year Private consumption expanded by 4.9% during the fourth
benefited retail businesses located in major cities, as well as quarter of 2024. Positive labour market, continued household
tourist-oriented towns and islands. spending and vibrant tourism activities led to sustainable
growth in this component of GDP.
Malaysia retail industry reported a positive growth rate of 3.8%
for the entire year of 2024 (Table 1). This final annual growth Unemployment rate during the fourth quarter of 2024 remained
figure was slightly below market expectation. In November last at 3.2%. Labour force participation rate increased further to
year, the estimate by Retail Group Malaysia was 3.9%. 70.6% during the quarter.
 TABLE 3: YEAR ON YEAR PERCENTAGE CHANGE IN RETAIL SALES
BY RETAIL SUB-SECTOR, 2024
Retail Sub-Sector 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Whole
%
Department store cum supermarket 12.3 -3.9 6.7 3.1 4.3
Department store 9.7 -13.8 -4.7 -1.0 0.0
Supermarket and hypermarket 2.0 -1.6 -0.5 2.5 0.8
Mini-market, convenience store & cooperative 5.6 7.0 8.7 8.1 8.5
Fashion and fashion accessories 12.6 3.1 5.7 5.6 6.3
Children and baby products* 4.8 -0.9 -2.0 -8.0 -1.8
Pharmacy 8.2 2.5 6.3 4.1 5.0
Personal care 0.4 7.6 4.7 -2.2 2.8
Furniture & furnishing, home improvement as well as -2.1 -4.6 -3.3 0.7 -2.2
electrical & electronics
Other specialty retail stores 4.6 -2.0 -5.5 -0.3 -0.6
Notes:
*- children and baby products include apparel, accessories, equipment, school uniform and toys
Source: MRA/ MRCA/ Retail Group Malaysia

RETAIL SUB-SECTORS’ SALES COMPARISON Conversely, the business of Personal Care sub-sector suffered a
drop of 2.2% during the last 3-month period of the year. For
Despite the year-end holidays, the sales performances of year 2024, the sale of this sub-sector moderated at 2.8% in
numerous retail sub-sectors during the fourth quarter of 2024 growth rate.
were unsatisfactory.
The growth rate of Furniture & Furnishing, Home
The growth rate of Department Store cum Supermarket sub- Improvement as well as Electrical & Electronics sub-sector
sector rose by 3.1% during the fourth quarter of 2024. For the recovered with 0.7% in growth rate during the fourth quarter of
entire year, the business of this sub-sector expanded by 4.3%. 2024. For the whole year, the sale of this sub-sector fell by
2.2%. It was the worst performing retail sub-sector for the year.
On the other hand, the retail business of Department Store sub-
sector suffered a negative growth of 1.0% during the last The growth rate of Other Specialty Stores sub-sector (including
quarter of 2024. For the entire year, its performance ended at photo shop, fitness equipment store, second-hand goods' store,
the same level as a year ago. store retailing musical instrument, arts and crafts store, store
offering lifestyle products, optical shop, gifts store as well as
The Supermarket and Hypermarket sub-sector achieved an sports store) eased at -0.3% during the fourth quarter of 2024.
encouraging growth rate of 2.5% during the fourth quarter of The business of this sub-sector contracted by 0.6% for the
2024. The overall growth rate of this sub-sector was 0.8% in entire year.
2024.
NEXT 3 MONTHS’ FORECAST
The Mini-Market, Convenience Store & Cooperative sub-sector
maintained its growth momentum during the fourth quarter of Members of the two retailers’ association project an average
2024. During this period, it grew by 8.1%. For the whole year, growth rate of 5.9% for the Malaysia retail industry during the
it expanded by 8.5%. Once again, it was the best performing first quarter of 2025 (Table 4). Despite the Chinese New Year
retail sub-sector of the year. celebration and monthlong school holiday, not all retail sub-
sectors are expecting promising results.
During the fourth quarter of 2024, the business of Fashion and
Fashion Accessories sub-sector surged by 5.6%, as compared to The department store cum supermarket operators are hopeful of
the same period a year ago. For the year 2024, it recorded a a strong recovery during the first quarter of this year with a
promising growth rate of 6.3%. growth rate of 12.0%. This is the most optimistic projection
among the retail sub-sectors.
The Children and Baby Products sub-sector reported another
disappointing performance of -8.0% in growth rate during the On the other hand, the department store operators are expecting
last 3 months of the year. This was the third consecutive quarter a modest recovery with a growth rate of 4.0% for the first 3-
of sales decline for this sub-sector. For the full year, the sale of month period of this year.
this sub-sector declined by 1.8%.
The supermarket and hypermarket sub-sector should achieve a
During the fourth quarter of 2024, Pharmacy sub-sector decent growth rate of 1.7% for the first quarter of 2025.
reported a moderate growth rate of 4.1%, as compared to the
same period a year ago. This sub-sector managed to achieve a After a strong performance in 2024, operators of mini-market,
healthy growth of 5.0% for the entire year. convenience store and cooperative are more conversative on its
business performance for the first 3 months of this year. It
anticipates a small growth rate of 1.1%.
 TABLE 4: 3-MONTH RETAIL SALES FORECAST TABLE 5: MALAYSIA RETAIL INDUSTRY
BY RETAIL SUB-SECTOR, QUARTERLY GROWTH RATE, 2025
JANUARY-MARCH 2025 Quarter Growth rate
Retail Sub-Sector % Growth (%)
rate First (e) 5.9
Overall (weighted) 5.9 Second (e) 4.8
Department store cum supermarket 12.0 Third (e) 2.8
Department store 4.0 Fourth (e) 3.5
Supermarket and hypermarket 1.7 Whole year (e) 4.3
Mini-mart, convenience store & coop. 1.1 (e)- estimate
Fashion and fashion accessories 11.8 Source: Retail Group Malaysia
Children and baby products* -7.5
Malaysians continue to face higher retail prices on goods and
Pharmacy 5.6
services since beginning of this year. Higher prices were
Personal care 9.1
observed from groceries bought from supermarket to services
F&F, home improvement and E&E# 1.3 such as car park charges, transportation and logistics services,
Other specialty retail stores 3.6 repair services, health care related services, media subscription
Notes: services, etc.
*- include apparel, accessories, equipment, school
uniform and toys There will be an electricity tariff hike from second half of this
#- furniture & furnishing, home improvement and year. While 85% of Malaysian households will continue to
electrical & electronics enjoy government subsidy on electricity usage, businesses will
Source: MRA/ MRCA/ Retail Group Malaysia incur higher operation cost due to this increment. Retail
businesses are likely to pass this cost to end consumers.

Hopeful of strong demand during Chinese New Year festival E-invoicing in Malaysia has begun since 1 August 2024 for all
and monthlong school holiday, retailers in the fashion and large corporations. For small retail businesses with annual
fashion accessories sub-sector are targeting a strong recovery turnover of at least RM150,000, it required to generate e-
with growth rate of 11.8% during the first quarter of 2025. invoices for all business transactions starting from 1 July 2025.
Announced last month, Malaysian government has delayed the
Retailers selling children and baby products are anticipating its implementation of e-invoicing for businesses with annual
business to drop by 7.5% during the first 3 months of this year. turnover between RM150,000 and RM500,000 until 1 January
This is the lowest projection made among the retail sub-sectors. 2026

Pharmacy operators expects its business to rise by 5.6% during Based on the Budget 2025 announced on October 18, several
the first quarter of this year. new policies and measures will be implemented in 2025. These
are expected to have impact on Malaysia retail industry.
Similarly, retailers in the personal care sub-sector are expecting
their businesses to rebound in this new year. It aims to achieve Monthly minimum wage has increased from RM1,500 to
a growth rate of 9.1% for the first quarter of 2025. RM1,700 since 1 February 2025. Enforcement for companies
with less than 5 workers will be delayed by 6 months. This new
After a dismal performance in 2024, operators of furniture & policy has impacted retailers and food operators that rely
furnishing, home improvement as well as electrical & heavily on foreign workers. Higher operation cost of these
electronics are expecting their business to return to positive retail operators has led to higher retail prices.
growth with 1.3% during the first 3 months' period of this year.
In early March this year, the Dewan Rakyat has passed
Retailers in other specialty stores sub-sector (including photo amendments to the Employees Provident Fund Act 1991 which
shop, fitness equipment store, second-hand goods' store, store make EPF contribution mandatory for all foreign workers in
retailing musical instrument, arts and crafts store, store offering Malaysia. Starting from fourth quarter of this year, employers
lifestyle products, optical shop, gifts store as well as sports will have to contribute 2% of a foreign worker’s salary while
store) are foreseeing their businesses to grow by 3.6% during the foreign employee’s contribution has also been set at 2%.
the first quarter of this year.
The current subsidy on RON95 fuel will be removed from
THE YEAR 2025 middle of 2025. A new subsidy will be distributed to about
85% of the Malaysian households. Malaysians eligible for
Retail Group Malaysia (RGM) revised its annual growth rate in RON95 subsidy will be determined by the Basic Expenses for
retail sale for 2025 to 4.3%, an upward adjustment of 0.3% Decent Living (PAKW), Cost of Living Index, size of
from the projection made in November last year (Table 5). household, employment status, number of cars, number of
working adults as well as number of schooling children.
Similar to last year, the biggest challenge for Malaysia retail
industry in the new year is the rising cost of living. The coverage of sales and services tax will be expanded from 1
May 2025, including premium foods and imported food
products. This will lead to higher retail prices on selected food
products. However, the overall negative impact will be
insignificant.
For the first quarter of 2025, Malaysia retail industry is For 2025, higher food prices and higher operation costs will
expected to enjoy an encouraging growth of 5.9% due to remain the struggles for F&B operators in Malaysia. Weak
Chinese New Year festival as well as the monthlong school Ringgit contributes to higher costs of raw materials and food
holiday from January to February (Table 5). The attractive ingredients.
Malaysian currency as well as the visa-free entry for visitors
from China brought in large number of foreign tourists to the World coffee prices have been rising since end of last year due
country during the period of Chinese New Year celebration. to unfavourable weather conditions in key coffee producing
countries. This has led to many independent and chain coffee
Malaysia retail industry is projected to grow by 4.8% during cafes to increase the prices of coffee drinks in Malaysia.
the second quarter with contribution mainly from Hari Raya
festival. Hari Raya Aldilfitri this year will be celebrated from The boycott of several international F&B franchises due to the
first week of April. Middle East war will likely to continue in the immediate term.
This may lead to more temporary and permanent closures of
The retail sector in the country is anticipated to expand these F&B outlets across the country. The new opening of
moderately by 2.8% during the third quarter of 2025. many independent cafes and the new entry of several
international F&B chains will worsen the situation.
For the last quarter of 2025, Malaysia retail industry is hopeful
of a 3.5% growth rate as compared to the same period a year Despite the Chinese New Year festival and higher tourist
ago. activities, cafe and restaurant operators are anticipating their
businesses to grow at a slower pace at 5.4% (Table 6) during
FOOD & BEVERAGE SECTOR the first quarter of 2025, as compared to the same period last
year.
During the last quarter of 2024, Malaysian consumers bought
many of their beverages and meals at higher prices. According Similarly, food and beverage kiosk and stall operators are
to Department of Statistics Malaysia, Food Away From Home expecting their businesses to consolidate further with a growth
had the highest increase at 4.8% for the month of December. rate of 0.1% during the first quarter of 2025.

The prolonged Israel-Palestine conflict continued to affect sales

of several international F&B franchises. Many Malaysian
consumers were still avoiding these restaurants and cafes. This
had led to heavy losses of several F&B brands operating in
Malaysia. Some outlets remained closed down temporarily, Footnote:
§ This report is provided as a service to members of MRA, MRCA and the
while under-performing outlets were shut down permanently.
retail industry. It provides industry data that give retailers better
analytical tools for running their retail businesses.
Food & Beverage Outlets (Cafe and Restaurant) enjoyed a less- § This report is not allowed to be reproduced or duplicated, in whole or
than-expected growth rate of 6.6% during the fourth quarter of part, for any person or organisation without written permission from
Malaysia Retailers Association, Malaysia Retail Chain Association or
2024, as compared to the same quarter a year ago (Table 6). For Retail Group Malaysia.
the whole year, it achieved a growth rate of 8.0%. § Retail Group Malaysia is an independent retail research firm in
Malaysia. The comments, opinions and views expressed in this report are
Similarly, Food & Beverage Outlets (Take-Away, Kiosk and of writer’s own, and they are not necessary the comments, opinions and
Stall) did not perform as projected in November last year (at views of MRA, MRCA and their members.
§ For more information, please write to [email protected].
6.8%). During the fourth quarter of 2024, this sub-sector
reported a drop in business by 0.6%. Nevertheless, it recorded a
strong growth rate of 8.9% for the entire year of 2024.

TABLE 6: MALAYSIA FOOD & BEVERAGE INDUSTRY

QUARTERLY GROWTH RATE, 2024/ 2025
Year 2024 2025
Quarter 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Whole 1st Qtr
(e)
%
Cafe and restaurant 7.4 7.0 8.2 6.6 8.0 5.4
Take-away, kiosk and stall 9.7 17.6 6.8 -0.6 8.9 0.1
Notes:
-Cafe and restaurant include fast food restaurant, cafe, coffee cafe, bakery cafe, restaurant, full-
service restaurant and caterer.
-Take-away, kiosk and stall include food outlet caters for take-away only, bakery without seating,
kiosk and food stall.
(e)- estimate
Source: MRA/ MRCA/ Retail Group Malaysia