Weaker consumer spending clouds sector

TheStar Thu, Jan 14, 2021 09:50am - 1 week ago


The non-specialised stores such as provisions stores, mini market, convenience stores, supermarkets and hypermarkets had also seen a general slowing down.

PETALING JAYA: There will be continued downward pressure on distributive trade and retail spending, said AmBank Research.

In its report, the research house said distributive trade figures fell for the second month in a row, down 1.2% year-on-year in November which is the fastest contraction since August, said AmBank Research.

It had been impacted by the selective restrictive measures taken to contain the spread of the virus.

“Downward pressure on distributive trade and retail spending will stay especially with uncertainties on the pandemic virus spread.

“This will continue to weigh on both business confidence and consumer sentiment, clouded by concerns over the type of restrictive measures imposed to contain the virus spread, ” AmBank Research said.

It noted that distributive trade had contracted for the second month in a row following a contraction of -0.8% year-on-year in October.

The fall had been attributed to the contraction in retail sales of -2.3% year-on-year in November from -1.5% year-on-year in October.

This more than offsets the gains reported from wholesale trade of -0.7% year-on-year in November from -0.9% in October, and motor vehicles sales of 1.2% year-on-year in November from 2.2% year-on-year in October.

“The downtrend in retail sales was a result of weaker consumer spending inflicted by the restrictive measures, poor job market and challenging sentiment issues, ” the research house said.

It noted that the downward pressure on distributive trade and retail spending will continue to cloud the outlook.

This is due to the continued spread of the Covid-19 virus and this will continue to weigh on both business confidence and consumer sentiment.

“The outlook is affected by concerns over the type of restrictive measures imposed to contain the virus spread, ” it said.

Meanwhile, AmBank Research said the details of retail sales showed specialised stores falling by 4.9% year-on-year in November from -4.7% year-on-year in October.

This had been dragged by weaker automotive fuel sales of -14.7% year-on-year in November due to lower mobility and fuel sales.

It said the non-specialised stores such as provisions stores, mini market, convenience stores, supermarkets and hypermarkets had also seen a general slowing down.

“Non-specialised stores also slowed down to 2.3% year-on-year in November from 4.4% year-on-year in October partly due to the base effect, ” the research house said.

“However, spending remained positive in areas like stalls & market with a growth of 7.2% year-on-year in Nov from 7.0% year-on-year in October as well as the e-commerce space & direct selling that has seen a 10.9% year-on-year growth from 8.3% year-on-year in November and October respectively, ” it added.






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