PETALING JAYA - The local retail sector is already feeling the pinch of slower sales as a result of the various government subsidy rationalisation measures, which caused consumers to be more cautious with their spending, according to industry experts.
Malaysian Association for Shopping and Highrise Complex Management past president Richard Chan said many retailers were experiencing a slowdown in sales despite the approaching Christmas season, a time when consumers tend to increase spending.
"Sales are slower compared with last year. Consumers are cautious with their spending because of the various government policies," he said.
Consumer spending during this time is often boosted by year-end sales and promotions in shopping malls and hypermarkets, he added.
As part of its various fiscal consolidation measures, the Government had over the past few months, reduced its subsidies for fuel, resulting in the increase in the prices of RON95 petrol and diesel by 20 sen to RM2.10 and RM2 per litre respectively.
It also abolished the 34 sen per kg subsidy for sugar, which resulted in the price of domestic refined sugar increasing to RM2.84 (S$1.10) per kg.
Effective next year, the average electricity tariffs in Peninsular Malaysia, Sabah and Labuan will increase by 15 per cent to 38.54 sen per kilowatt-hour (kWh) and 34.52 sen/kWh respectively.
Further rounds of subsidy rationalisation are expected in 2014 as the Government consolidates its expenditure.