PUTRAJAYA must take stringent measures to resolve the current issues that are affecting the sales and operations of the retail industry, said stakeholders.

Retail Group Malaysia (RGM) said Putrajaya needs to address three issues that have been plaguing the industry: rising cost of goods, labour shortage and lack of tourists arrivals.

Its managing director Tan Hai Hsin said the price of basic necessities has continued to rise and this trend is expected to continue in the next few months.

“Rise in food prices affects both costs of cooking at home and dining out,” Tan told The Malaysian Insight.

“Never has this happened before in the history of Malaysia as all food sub-groups tracked by the Department of Statistics witnessed price hikes.

“In addition, the prices of many consumer goods have also risen.”

He said the prices of many foods and consumer goods have seen double-digit increases within a short period of time.

“When the minimum wage was increased from RM1,200 to RM1,500, it saw the increase of operation costs not just for retailers, but all operators in the retail supply chain.

“Prices of consumer goods have increased in stores nationwide including in small towns and rural areas.”

Tan added that another contributing factor is the Russia-Ukraine war that has disrupted the global supply chain.

“This caused higher energy prices as well as shortage of raw materials and industrial parts not just in Malaysia but around the world.

“While some retail outlets in Malaysia are facing shortages of merchandise to sell, many have to deal with higher costs of retail goods. Higher costs of goods leads to higher retail prices.”

He said with the escalation of prices, retail prices have led to higher cost of living.

“This means less money to buy non-essential goods and services where the shopping behaviour and patterns of B40 and M40 groups have changed in recent months.

“They try to cook more at home, delay buying high-value goods, pay greater attention to offers and discounts given by retailers, as well as lessen trips to nice cafes and restaurants.

“The government needs to resolve this price shock and not allow it to continue until next year,” Tan said.

On the shortage of workers, Tan said it has affected sales and operation hours.

He said the shortage applies to both locals and foreign workers which includes the entire retail supply chain.

“It is more serious in Johor due to the strong Singapore currency. They are facing similar problems, so they are willing to offer very attractive salaries to attract Malaysians to work there.

“Putrajaya needs to resolve this issue as soon as possible as it will slow down economic recovery in Malaysia.”

As for tourism, Tan said in terms of shopping traffic, domestic tourism has recovered during the recent Hari Raya festival.

“Early this month, The Tourism, Arts and Culture Ministry (Motac) revised its target for foreign tourist arrivals to 10 million.

“However, this is still way below the foreign tourist arrival in 2019 at 26.1 million.”

He said that the  lack of foreign tourists is affecting retail businesses in centres that are highly dependent on foreign tourists.

“Examples are Central Market in Kuala Lumpur and the international airports (especially KLIA and KLIA2).

“Putrajaya needs to do more to attract foreign tourists to visit Malaysia for the next one year.” – September 18, 2022.