PETALING JAYA (June 2): Sunway Malls expects a stronger sales performance for the second quarter of 2022 (2Q22) at 117% of pre-Covid-19 pandemic levels on the back of a better Raya 2022 sales performance, the country's transition to the endemic phase, an improved labour market and stronger domestic and external demand.
According to a press statement on Thursday (June 2), the mall group operator with seven physical malls and one digital mall saw its sales performance come in above expectations at 143% in April and 110% in May. It also expects its performance to be sustained at 100% or above in June, while the sales performance estimated at 117% in 2Q22 would surpass 100% in 1Q22.
“Certainly, the high sales performance during Raya in April provided a significant, leading and comfortable start to 2Q22. In fact, April’s 143% sales performance is the highest till date and surpassed even January’s 116% during the Chinese New Year period. Even if we compare Raya 2022 to pre-pandemic Raya levels, it was 121%. Definitively, this is a very strong performance however you measure it,” Sunway Malls & Theme Parks chief executive officer HC Chan noted.
Despite geopolitical tensions and escalating oil prices, the country's transition into the endemic phase of Covid-19 and international border reopening shored up Malaysia’s consumer sentiments. The latest MIER Consumer Sentiment Index for 1Q22 rose 11.7 points quarter-on-quarter to 108.9, signalling a return to past the 100-point optimism after a contraction at 97.2 points in 4Q21. The brighter outlook for employment prospects, increased income and boost in domestic demand lifted consumer spending.
Amid the reopening of the economy, consumer-related activities continued to recover with stronger growth as reflected in the retail and leisure-related sub-sectors. Private consumption, which grew at a faster pace of 5.5% in 1Q22, is expected to continue in the coming quarters, supported by higher spending on necessities and selected discretionary items such as restaurants and hotels, recreational services and household furnishings.
“With the 2Q22 forecast, Sunway Malls will see three consecutive quarters of sales performance achieving 100% and more. We achieved our first quarter of 100% against pre-pandemic levels in 4Q21 and repeated the feat in 1Q22. With the latest 2Q22 projection, we are sighting nine months of uninterrupted 100%. Sunway Malls is seeing an accelerated and sustained recovery,” explained Chan.
The improved performance was also attributed to Sunway Malls' replacement of outgoing weak and ailing retailers with strong and vibrant retailers with a proven track record in driving footfall and higher psf sales. The continued strong performance of these retailers is expected to sustain the mall group's performance moving forward.
“From our diverse malls portfolio, we forecast a return to 2019’s profitability. Depending on the location, some malls might even exceed pre-pandemic level profitability,” shared Chan.
In terms of ageing, the mall group is also seeing a marked improvement in lowering outstanding arrears that stood at RM100 million in September 2021. The mall group forecasts a reduction of 80% by the end of 2022.
This year, the mall group is also anticipated to keep its new shop opening momentum resilient with 300 new shops opening following the expansion of Sunway Carnival and other renewals across its malls.
For the record, Sunway Malls welcomed 200 new shops in 2020 and 160 additions in 2021 despite the ongoing Covid-19 pandemic. “When we examine the metrics of profitability, arrears and new shops opening, Sunway Malls is performing well on all fronts and even buckling the industry’s trend,” remarked Chan.