WITH the Hari Raya festive season around the corner, retailers are bemoaning the high cost of doing business due to the weakening ringgit.

Retailers met by The Malaysian Insight said they have been affected more than customers as the uncertain economic condition has led to the spiralling cost of doing business.

“My cost has gone up by 40% this year. Hence it has become more difficult,” said Jorham Salleh, who sells traditional outfits in Shah Alam.

He blamed the depreciation of the ringgit for the increase in cost.

The ringgit has depreciated 2.3% year-to-date and the currency was the worst performing Asian currency last month.

At press time, the ringgit continued its downward momentum,trading at RM4.1585 against the US dollar.

“We import textiles, hence, the cost will increase.”

He said the weaker ringgit had led to increased production cost as many Bangladeshi and Indonesian tailors no longer want to work in Malaysia.

Jorham said, however, that he has been able to bear the extra costs as he has taken supplies on credit.

“We owe them money first, and only settle the payment once we make some profit. That’s how we have been surviving,” he added.

Another retailer who sells home decor items concurred with Jorham that the higher cost of doing business was due to poor economic conditions.

Azlina, 39, said she feels the pinch after the goods and services tax (GST) was replaced with the sales and services tax (SST).

She said the SST has burdened businesses more than the GST.

“We are caught in a limbo. My cost is higher under the SST but we can’t hike the prices too much as people won’t buy our products.

“Maybe because what I sell is not a priority good,” she added.

External headwinds such as the US-China trade war and slow global economic growth have caused the ringgit to depreciate.

Last month, news on the possible downgrade of Malaysian sovereign bonds by FTSE Russell added further pressure on the currency.

Prime Minister Dr Mahathir Mohamad did not rule out the possibility of imposing protection measures if the currency is at a risk of being devalued further due to continuous attacks by speculators.

During his first stint in office, Dr Mahathir had pegged the value of the ringgit at RM3.80 against the US dollar during the 1997 Asian Financial Crisis. The peg was only released in 2005.

Sales as usual

Jorham said he had not hiked prices despite the increase in costs but was able to maintain good sales ahead of the fasting month.

“Sales for festive clothings will not be affected. The sales will be the same if not better than last year.

“People will still buy because Raya comes only once a year. Even if they have no money, parents will at least buy their children new clothes,” he said.

“Normally they would spare the required amount earlier on.”

Sarimah Abdullah, 49, another seller of traditional outfits said festive outfits are more affordable these days and people will still be able to buy them.

“There’s no such thing of bad economic condition when it comes to buying Raya outfits. Even if they’re tightening their belts they will at least buy one pair.

“Normally, each family will look for colour coordinated outfits. This is also why sales for Raya outfits have been good.”

Meanwhile, civil servant Rahmat Ariff, 47, said he has chosen to shop for necessities for the festive season at a Ramadan bazaar due to higher cost of living

“Although expenses have increased, we still have to buy Raya outfits for the family, that too colour coordinated ones. That’s why we have chosen the bazaar. The prices are cheaper and there’s an opportunity to bargain.”

He said he had reduced his Raya budget from RM3,000 to RM2,500.

Shop assistant Anisah Salleh, 39, said she had kick-started her preparations by saving earlier on.

She said she has allocated RM2,000 for expenses including outfits for her children and to return to her hometown.

Federal Territories Malay Hawkers and Petty Traders Association (PPPKM) president Mohamad Abdullah admitted that the Ramadan bazaar has become the preferred place to shop not only for the lower income groups but also for those who are looking for value for money purchases.

“It’s become a tradition for Muslims to buy their Raya necessities at Ramadan bazaars because it is cheaper to do so,” he said.

“That is why each year the demand for bazaar spots has been increasing. This has also become a place for people to earn a living.” – May 12, 2019.