KUALA LUMPUR, SINGAPORE: Malaysians and tourists spent nearly RM67.1 billion (S$28.5 billion) last year, a 12.8 per cent growth from 2006, and the fastest growth in 16 years.
The forecast for this year is RM71.8 billion in retail sales.
Most of the purchases last year involved shopping at specialty sub-sectors (such as toys, fitness equipment and optical products) and fashion and fashion accessories.
The latest Malaysia Retail Industry Report also showed that the other beneficiaries of the consumer ringgit were department stores such as Parkson and Metrojaya, and department store-cum-supermarkets such as The Store and Jusco.
Consumers were also driven to buy during the Mega Sale carnival, and civil servants who received an increment also spent more. Tourists accounted for 10 to 12 per cent of sales during Visit Malaysia Year 2007, the report added.
Aggressive expansion of retail stores and the opening of four mega malls (Pavilion, The Gardens, Sunway Pyramid extension and AEON Bukit Tinggi) widened both the retail pie and reach to consumers.
"Malaysian consumers did not cut down on their spending although prices of food (take-away food and meals at food and beverage outlets) and groceries (milk and meat) increased last year due to higher raw material prices as a result of higher oil prices," the report said.
The quarterly report is tabulated by Retail Group Malaysia (RGM) on behalf of the Malaysian Retailers Association. The data takes into account all sales in Malaysia, excluding big ticket items like houses and cars.
RGM managing director Tan Hai Hsin cautioned that the impressive growth numbers for last year was not an indication of recovery for the retail industry, as consumer confidence was likely to dip and result in a tightening of purse strings.
RGM expects consumers to spend cautiously and projects that retail growth will only be about seven per cent this year.
Tan said that the surging costs of daily staples and the imminent rise in fuel price may see an impact on spending in the second half of the year.
RGM pointed out that Malaysia was fortunate that the food crisis was not an economic crisis.
