Visiting the shopping malls of Kuala Lumpur can be a confusing experience. It is always full of happy people with friends and lovers. And probably businesspeople with their clients too.
As I patiently await my opportunity to take a break from this crazy country, I find myself with an employment that is physically located close to Midvalley Megamall, one of the largest shopping malls in Malaysia. This means I visit the mall on every working day.
I do not notice any let up on visitors to the malls. Amid talks of pessimism regarding the economy and ugly reports, the shopping does not seem to relent.
Perhaps, Midvalley Megamall is an aberration, filled with those belonging to a certain class that is by and large not affected by the economic pain even as experts are predicting that the economy could suffer as much as 4% contraction for the first quarter of 2009. After all, the main victims of the ongoing economic slowdown are those from the manufacturing sector. Most frequenting the mall do not seem to belong to the manufacturing sector.
But I can never be sure without data. It could be that I am looking for pattern that I want to see, even if it is not there.
The Department of Statistics today confirms that the trend in Midvalley Megamall is neither aberration nor isolated. I am not dreaming. Based on year-on-year comparison, the retail trade sector actually grew by almost 8%, in defiance of other sectors.
RETAIL TRADE
1. Sales Value
The retail trade sub-sector posted an increase of 7.8 per cent from the comparative quarter of the previous year. The main catalyst was the group of non-specialised retail trade in stores (such as department stores and supermarket including hypermarket) which registered a double-digit growth of 44.4 per cent and retail sale of food, beverages and tobacco in specialized stores of 16.2 per cent. On a quarterly basis, this sub-sector contracted 1.3 per cent.
2. Employment and Salaries & Wages
The number of persons engaged rose 8.4 per cent from a year ago followed by a 9.9 per cent expansion in salaries & wages paid out. A marginal increase of 0.7 per cent in the number of persons engaged and a 3.3 per cent in the salaries & wages was recorded quarter-on-quarter. [Distribution Trades First Quarter 2009. Department of Statistics. May 26 2009]
I think the growth is likely caused by MNC hypermarket retailers’ aggressive expansion nationwide. As a person once employed in the supply chain industry, I can say with certainty that that expansion is true. The expansion of TESCO for instance and especially, was amazing. Their latest expansion plan includes a superlarge distribution center in Bukit Beruntung.
Indeed, the retail sector has been the most impressive and resilient sector so far. In the fourth quarter of 2008, it grew by over 15% based on year-on-year comparison.
It is true that based on quarter-on-quarter comparison, there is a decline but I think that is mostly due to seasonal effect.
It might have been likely that if there was no expansion, there might be a contract in the retail sector. Expansion in a way opens new market. This expansion may have overwhelm any reduction of sales faced by pre-existing outlets. In any case, this raises two questions: if the expansion factor is controlled for, would the retail sector suffer a decline in line with other sectors? Given the expansion, how good is the retail sector — which typically a good barometer of the real economy — in being an indicator of the real economy?
Regardless, that however does not explain Midvalley Megamall still. Perhaps, like I have mentioned above, class of profession plays a large factor as far as Midvalley Megamall is concerned, thus helping the sector to continue to grow in spite of the environment.
