CUSTOMER traffic in shopping centres nationwide have remained steady since the sales and services tax (SST) was raised from 6% to 8%, but sales have slowed down, the Malaysia Shopping Mall Association said.
The group said the higher SST has caused the the cost of living, cost of doing business, and prices to rise.
Association president Phang Sau Lian said retailers are keeping a positive outlook despite the rising cost of living.
"Retail Group Malaysia (RGM) projected a rebound in the first quarter of 2024 and forecasted a 4% sales growth for the full year of 2024.
"So far, there is no critical situation of shop closures, but some are consolidating their business for efficiency gains," she said.
The government raised the SST to 8% on March 1, 2024.
Pang said more tourists were reported in the malls in the city centre and tourist destinations.
The Tourism Ministry reported 5.8 million tourists in the period between January and March. That is a a 32.5% rise from the last quarter, she said.
A December 2022 survey conducted by the group showed the country had 727 malls, nearly half of which were in the Klang Valley.
The National Property Information Centre counted 1,074 shopping malls in Malaysia in 2023.
“Selangor, Kuala Lumpur, Johor, and Penang are the states with more retail space and traffic.”
Pang said the 2022 survey showed that occupancy stood at 87%.
"We are due to do another survey in December 2024 but we observe that the overall occupancy may have fallen marginally.
"Napic report indicated a 2% increase in mall occupancy to 77.4% in 2023."
Despite the current economic climate, Pang said more malls are being built but many were delayed by the pandemic.
Napic reported there will be an additional 162,000sq m of retail space in 2024, in Merdeka 118, and Pavilion Damansara Phase 2 in Kuala Lumpur, and Elmina Lakeside in Selangor.
"The association is also seeking financial assistance and closer collaboration with the government to increase footfall and tourists in the malls. We also want incentives and tax allowances for domestic spending," Pang said.
As for the deferment of the high-value goods tax, Pang hopes the government will scrap it altogether
“Definitely scrap it because it will result in domestic spending being diverted to overseas retailers and discourage high-spending tourists." – May 22, 2024.
