FIVE Giant supermarkets will shut their doors on November 5, following a decision not to extend their leasing contracts, as the retail industry continues to struggle with sluggish sales.

Giant’s owners GCH Retail Malaysia said in a statement to The Malaysian Insight yesterday that it “has decided to cease its operations located at Sri Manjung, Sg Petani, Shah Alam City Centre Mall, Sibu and Selayang Lama following the end of its lease agreement”.

The statement noted that the decision to shut down the stores was part of efforts to “relook our operations to increase effectiveness and productivity”.

When questioned why Giant did not pursue an extension of the lease, the company spokesperson declined to answer. The spokesperson also did not respond to queries on the fate of the staff at the affected outlets.

The closure comes as Malaysia’s retail sector enjoyed a slight reprieve in sales for the second quarter of the year, compared with the first three months of 2017.

Retail sales expanded 4.9% from April to June, reversing a dismal performance from January to March when total sales dipped 1.2% year-on-year.

However, industry players say the increase was temporary and spurred by increased spending for the Hari Raya celebrations, adding that the rest of the year is expected to see a further weakening as consumers continue to tighten their belts in an uncertain economy.

The supermarket and hypermarket sub-sector reported a worse-than-expected decline in growth rate of 4.8% during the first quarter of 2017, the worst among the retail sub-sectors.

Malaysia Retailers Association had said that department stores and supermarket operators are expected to experience a further drop in sales by 2.5% in the third quarter of the year.

Recently, the Malay Business Council revealed that the introduction of the goods and services tax (GST) in 2015 had led to the closure of several Malay retail businesses.

Since the announcement of its closure, the Giant supermarket at SACC Mall Shah Alam has seen a deluge of customers eager to stock up on items that the store is seeking to clear prior to shutting down.

Goods going for as low as RM1 were seen being snapped up.

“I only wanted to get some groceries, but when I saw how cheap the items were, I decided to stock up,” said a shopper who only wanted to be known as Johan.

“It’s a waste if I don’t buy them now because the prices are so low.” 

Giant supermarkets opened 73 years ago and are known to offer sundry goods at competitive prices. However, apart from battling weakened consumer spending patterns, the chain has faced competition from newer retailers in the market. – October 29, 2017.