KUALA LUMPUR: The Malaysian Retailer-Chains Association (MRCA) expects consumers to loosen their purse strings as the year-end approaches, with people now ready to “reward themselves” after months of belt-tightening.

“A lot of consumers are looking forward to rewarding themselves after a year of savings and managing their money in a more intelligent manner,” MRCA president Lee Hwa Cheng told The Edge Financial Daily.

He said the upcoming Malaysia Year-End Sales (MYES), slated to kick off on Nov  21, would also bring an expected increase in spending as it coincided with the school holidays and upcoming festivities.

This is in line with expectations of a rise in consumer sentiment in the last three months of the year, which had been flat for the past two quarters.

Lee said while consumer confidence had not seen an increase since the second quarter of 2009 (2Q09) according to statistics from the Malaysian Institute of Economic Research (Mier), there had been no decrease either.

“With strong leadership shown by our Prime Minister which has contributed to political stability, we also foresee market confidence rising coupled with the expected improvements in the stock market following Maxis’ re-listing on the local bourse,” he said.

Mier numbers showed that although the employment index in 3Q09 was the highest it had been in six quarters (since 1Q08), consumer sentiment remained flat since 2Q09 at 105.4 ppts.

This was despite an apparent rise, albeit a gradual one, in employment outlook into 4Q09. Other contributing factors included the stability of current and expected incomes, better labour market conditions and spending plans back on track, according to Mier.

Lee, who is also the executive chairman of Sinma Jewellery Centre Sdn Bhd, said pursuant to the global economic crisis, the catchphrase for shoppers had been “value for money”.

“What we have now are prudent shoppers. A lot of retail chains are working on improving customer services, loyalty programmes and so on,” he said.

Lee also said the association was planning a four-day shopping carnival at the end of March 2010 towards boosting consumer spending. He said it would be the association’s first and that it hoped to make the spending drive an annual affair.

The shopping carnival would allow consumers to purchase goods from MRCA members and non-members alike at discounted rates.

“We hope it will provide a platform for consumers to shop in a carnival-like atmosphere,” he said, adding that details of the proposed event were still being fine-tuned.

MRCA has a total of 144 established members of diverse businesses comprising 107 ordinary members and 70 associate members in the retail-related industries and four affiliate members.

Lee said the association members had collectively and successfully leveraged their networking ties to strategise on business expansion plans both locally and overseas.

“A number of our members are operating overseas and have expanded from Singapore to the United States,” he said. “They continue to share their experiences and hope to create an awareness of Malaysian brands.”

On the additional RM50 charge on credit cards that would have to be borne by primary card holders and RM25 for supplementary card holders and how it would impact shoppers, Lee said it would mean that consumers would cut down on the number of cards held.

He added the move did not augur well for the retail industry as the additional charges would discourage spending.

With regard to the proposed goods and services tax (GST), Lee said the association hoped the government would fine-tune it further before making it official.

“Hopefully, they will engage in more dialogue with the relevant industry players, giving the private sector a chance to be part of the decision-making process,” he said.


This article appeared in The Edge Financial Daily, November 9, 2009.