Malaysia Retail Sales Grow 3.7% in Q1 2026, but Full-Year Outlook Revised Downward

KUALA LUMPUR (June 12): Malaysia’s retail sales grew 3.7% in the first three months of 2026 compared to the same period in the previous year, according to Retail Group Malaysia.

However, the performance fell short of market expectations, as industry associations had earlier projected a 4.4% growth rate for March 2026, based on forecasts from members of the Malaysia Retailers Association (MRA) and the Malaysian Retail Chain Association (MRCA).

The first quarter was supported by major festive periods, including Chinese New Year in February and Hari Raya Aidilfitri from March 21, alongside government cash assistance totalling RM4.6 billion, which helped sustain consumer spending.

This included RM2.4 billion distributed under Phases 1 and 2 of Sumbangan Tunai Rahmah (STR) to around five million recipients, as well as a one-off RM100 Sumbangan Asas Rahmah (SARA) payment amounting to RM2.2 billion benefiting approximately 22 million individuals.

Despite these supports, Retail Group Malaysia revised its full-year retail growth forecast for 2026 downward from 4.0% to 3.8%, citing weaker-than-expected consumer purchasing power and external uncertainties, including geopolitical tensions in the Middle East.

Malaysia also recorded strong tourism inflows, with 10.65 million foreign visitors in the first quarter, maintaining its position as Southeast Asia’s most visited country for the second consecutive year, which helped support retail activity.

Performance across retail sub-sectors was mixed during the quarter.

The department store and supermarket segment recorded declines, with department stores falling 1.0% and supermarkets and hypermarkets growing marginally by 1.4%. The standalone department store segment posted near-flat growth of 0.3%.

In contrast, fashion and fashion accessories recorded growth of 4.2%, while the pharmacy segment also rose by 4.2%, indicating steady demand in essential and lifestyle categories.

The furniture, home improvement, and electrical and electronics segment delivered the strongest performance, expanding 9.3% year-on-year, driven by higher consumer spending in durable goods.

However, other specialty retail stores experienced a sharp decline of 16.5%, making it the weakest-performing segment in the quarter, while personal care sales also contracted by 0.7%.

Overall, the data reflects a cautious but stable consumer environment, supported by festive spending and government aid, but constrained by weaker sentiment and uneven performance across retail categories.