KUALA LUMPUR (Dec 9): Malaysia’s retail sales growth accelerated in the third quarter, an industry research firm said on Monday, flagging faster growth in the next three months due to the year-end holiday season.

Retail sales grew 3.8% in July-September 2024 compared to the same period in 2023, led by the minimarket-and-convenience store subsector, according to Retail Group Malaysia (RGM) in its latest industry report. In the second quarter, retail sales expanded 0.6% year-on-year.

“Higher household expenditures were due to rising retail prices of many goods and services,” RGM said. “Despite the absence of major festivals and national holidays, Malaysian consumers continued to shop for both basic and non-essential retail goods and services.”

Unemployment in Malaysia averaged 3.2% in the third quarter, near the 3% level economists consider to be full employment. Inflation, meanwhile, averaged at a manageable 1.9%.

Consumers, however, are bracing for rising cost of living, amid policy measures including subsidy rationalisation for widely-used RON95 petrol by the middle of 2025, and higher excise duty on sugar-sweetened beverages.

For the final quarter of 2024, RGM expects retail sales to increase 4.4%, with shopping traffic seen to remain steady.

“However, the holiday sales will not be [the] same as the pre-Covid period due to a shortened school holiday,” the RGM said, noting that the Chinese will likely begin their festive shopping in late December this year, as Chinese New Year will be celebrated from Jan 29, 2025 onwards.

For the whole of 2024, growth is likely to come in at 3.9%. For 2025, RGM is forecasting steady growth of 4.0% as rising cost of living challenges persist.