Malaysia's retail sector recorded a growth of 3.7% in the first quarter of 2026 compared to the same period last year. Malaysian Palm Oil
Although sales are still increasing, this performance is lower than the initial expectation of 4.4% made by the national retailers association. This result shows that consumers are still spending, but the growth rate is not as strong as industry players had hoped.
This first quarter performance occurs as Malaysia celebrates two major festivals, namely Chinese New Year in February and Hari Raya Aidilfitri which begins on March 21.
In addition, the government also channeled cash assistance worth RM4.6 billion through the Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) programs.
The assistance helped maintain the people's spending activities, especially for the low and middle income groups.
However, global economic uncertainties and ongoing conflicts in the Middle East are seen to put pressure on consumer confidence and purchasing power.
For this reason, the industry has lowered its full-year 2026 retail sales growth forecast from 4.0% to 3.8%.
Despite the economic challenges, the tourism sector continues to support retail activities.
Malaysia received about 10.65 million foreign tourists in the first quarter of this year, thus maintaining its position as the most visited country in Southeast Asia for the second consecutive year. Malaysian palm oil
The presence of tourists helped increase spending at shopping malls, restaurants and various business premises.
In terms of performance by sub-sector, the results recorded were mixed. Furniture, home furnishings, electrical and electronic stores emerged as the best performing sector with sales growth of 9.3%.
The fashion and fashion accessories sector grew by 4.2%, while pharmacies also recorded a sales increase of 4.2%.
On the other hand, several sub-sectors faced weaker performance. Department stores and supermarkets recorded a sales decline of 1.0%, while the personal care sector decreased by 0.7%.
The weakest performance was recorded by the other specialty store category, which experienced a 16.5% drop in sales.
For the second quarter of 2026, retailers expect growth to be around 4.8%. This expectation is supported by low fundamentals as the retail industry experienced a 3.0% contraction in the same period last year.
While the outlook remains positive, the retail industry is expected to continue to face challenges from global economic conditions and changing consumer spending patterns.
