KUALA LUMPUR (Dec 12): Malaysia's third-quarter retail sales performed better than expected, achieving a growth rate of 4.9% compared to the year-ago period, according to the latest Malaysia Retail Industry Report.

This result significantly exceeded the projected growth rate of 2.6% anticipated by industry members in September 2025. 

For the first nine months, the growth rate of Malaysia's retail industry rose by 2.7%, as compared to the same period in 2024, said Retail Group Malaysia.

The positive performance occurred despite rising retail prices for groceries and discretionary goods during the quarter under review.

Several government policies introduced in the third quarter directly influenced consumer purchasing power and behaviour, the report said.

These included a new electricity tariff structure in Peninsular Malaysia and an expansion of the sales and services tax (SST) for selected services.

Bank Negara Malaysia also reduced the overnight policy rate (OPR) from 3.00% to 2.75% in July.

Additionally, a one-off RM100 credit was distributed to Malaysians aged 18 and above under the SARA initiative, boosting consumer spending.

The price of RON95 petrol was reduced to RM1.99 per litre from Sept 30 for more than 16 million Malaysians. 

The national economy grew by 5.2% in the third quarter, supported by strong private and public investments.

The average inflation rate during the third quarter of 2025 had maintained at 1.3%.

Members of two retailers’ associations —  Malaysia Retailers Association (MRA) and Malaysia Retail Chain Association (MRCA)—  project an average growth rate of 5.0% for the fourth quarter of 2025 (4Q2025). 

The department store cum supermarket operators are expecting their businesses to recover with an average growth rate of 4.8% during 4Q2025. 

Conversely, the department store operators are expecting their businesses to remain weak with a negative growth rate of -5.5% for the last three-month period of this year. 

The operators of mini-markets, convenience stores and cooperatives are anticipating a sustainable growth rate of 13.3% during the fourth three-month period of this year. 

Retailers in the fashion and fashion accessories sector expect their businesses to stay upbeat with 9.2% in growth rate during 4Q2025, as compared to the same period a year ago. 

Similarly, operators of the supermarkets and hypermarkets are not optimistic of their sales in the next three months, and anticipate business for this sub-sector to drop by 2.7% in 4Q2025.