Downward pressure on distributive trade, retail spending
KUALA LUMPUR: Downward pressure on distributive trade and retail spending remains, analysts gather in a report on distributive sales, especially with uncertainties on the pandemic virus spread.
AmBank Research recapped that distributive trade contracted for the second month in a row, down 1.2 per cent year on year (y-o-y) in November - the fastest contraction since August versus -0.8 per cent y-oy in October due to the selective restrictive measures introduced to contain the spread of the virus.
The research firm also recalled that the poor showing was attributed to the contraction in retail sales (-2.3 per cent y-o-y in November from -1.5 per cent yo-y in October) which more than offset the gains reported from wholesale trade (-0.7 per cent yo-y in November from -0.9 per cent y-o-y in October), and motor vehicles sales (1.2 per cent y-o-y in November from 2.2 per cent yo-y in October).
“The downtrend in retail sales was a result of weaker consumer spending inflicted by the restrictive measures, poor job market and challenging sentiments issues,” AmBank Research said.
“Looking at the details of retail sales, it showed specialised stores falling by 4.9 per cent yo-y in November from -4.7 per cent y-o-y in October, dragged by weaker automotive fuel sales, down 14.7 per cent y-o-y in November, due to lower mobility and fuel sales.”
According to AmBank Research, the non-specialised stores (provisions stores, mini market, convenience stores, supermarket, hypermarket, and others) also slowed down to 2.3 per cent y-o-y in November from 4.4 per cent y-o-y in October partly due to base effect.
The research firm has however noted that spending remained positive in areas like stalls and market (7.2 per cent y-o-y in November from seven per cent y-o-y) as well as the e-commerce space and direct selling (10.9 per cent y-o-y from 8.3 per cent y-o-y).
“Downward pressure on distributive trade and retail spending remains, especially with uncertainties on the pandemic virus spread.
“This will continue to weigh on both business confidence and consumer sentiments, clouded by concerns over the type of restrictive measures imposed to contain the virus spread.”