PETALING JAYA: With the support of robust government measures, such as the extension of visa-free travel for Chinese tourists until 2026 and an RM550 million budgetary commitment for tourism promotion in Budget 2025, the consumer sector outlook is still positive.
MIDF Research said the Visit Malaysia Year 2026 campaign, which aims to attract 35.6 million visitors and generate RM147.1 billion in revenue, further supports the industry’s long-term growth potential.
The prolonged tourism rebound is anticipated to fuel stronger consumer activity, which would benefit important industries such as retail, convenience stores, and food and beverage (F&B).
“F&B companies like Spritzer Bhd, which stands to gain from increased demand for bottled water, are encouraged by increased tourist inflows,” it continued.
According to the research firm, Oriental Kopi Holdings Bhd is well-positioned to benefit from higher foot traffic at its urban locations and popular tourist destinations, taking advantage of the growing demand for regional food.
Convenience stores run by QL Resources Bhd, such as Family Mart, were thought to profit from the increased demand for quick meals, drinks, and travel necessities.
“The consumer sector is well-positioned for sustained growth, reinforcing its role as a key beneficiary of Malaysia’s tourism resurgence as airport traffic approaches pre-pandemic levels and government initiatives continue to attract more international visitors,” MIDF Research continued.
With strong growth in F&B, tobacco, and other specialty stores, Malaysia’s retail trade continued to grow at a steady pace, increasing 5.4% year-over-year (y-o-y) in December 2024 to RM65.8bil, bringing cumulative consumption to RM764.9bil in 2024, up from RM720.8bil in the previous year and RM661.1bil in 2022.
Retail sales were further bolstered by resilient labour market conditions, as evidenced by the unemployment rate falling to 3.1%, which was close to a decade low.
A consistent increase in the labour force participation rate, which marginally increased to 70.6% in December 2024, further bolstered this progress.
After three months of stagnation at 1.8% year-over-year, core inflation fell to 1.6% year-over-year in December 2024, while headline consumer price index (CPI) inflation slowed to 1.7% year-over-year.
According to the research firm, “This indicates that underlying demand pressures are contained, creating a stable environment for sustained consumer purchasing power.”
Additionally, the postponed RON95 subsidy rationalization, which is anticipated to begin in the middle of 2025, continues to help consumers by mitigating the possible impact of rising fuel prices on household spending through subsidies for 85% of the population.
