2021 saw the Singapore-origin department store Robinsons become one of the highest-profile casualties of the COVID-19 pandemic in Malaysia as both of the Robinsons department stores in the country closed down permanently, with the retailer winding up its store-based operations in Malaysia completely during the early stages of the year. This follows the October 2020 entering into liquidation of Robinsons’ Singapore-based parent company.
The imposition of strict lockdown restrictions in Malaysia during 2020 and 2021 present challenges to many department stores due to these retail outlets typically being located in busy city centre shopping districts or shopping centres located in the central business districts of major towns and cities. With restrictions in place on the ability of consumers to travel far from their homes, and with many consumers concerned about the possibility of being exposed to the COVID-19 virus whilst outside of the home, a marked preference for shopping in close proximity to the home emerged strongly over the course of 2020.
As mentioned above, 2021 saw a departure from the traditional focus on city centre locations that has generally defined department stores to a large degree in Malaysia, and as similar broadening of the geographic scope of the category was seen in terms of a shift in the attention of the category’s leading players to towns and cities outside of Malaysian capital Kuala Lumpur. With sales under pressure during 2020 and 2021 due to the impact of the COVID-19 pandemic and the official response to it, the reasonably high levels of saturation that had been seen among department stores in the commercial centres of Malaysia’s largest metropolitan area for some time became an unavoidable issue as plummeting levels of consumer foot traffic meant that the consumer base for department stores was spread very thinly between the numerous brands that are available to consumers in busy commercial districts of Kuala Lumpur.
While the numbers of department stores operating in Malaysia and the amount of selling space in the category are both expected to increase over the forecast period, recent shifts in consumer demand are expected to result in a contraction in the average amount of retail selling space per department store. The leading players in the category are increasingly mindful of the growing popularity of e-commerce, which has made it less important for department stores to maintain as wide and diverse a range of products as they have traditionally as consumers can now browse online catalogues to decide which products they are interested in before visiting a store.
Much of the struggle that department stores in Malaysia have faced since the onset of the COVID-19 pandemic is related to the dramatic declines seen in consumer foot traffic in busy city centres due to the imposition of social distancing regulations which limited the ability of consumers to spend time outside of the home. However, the category is expected to rebound strongly over the forecast period as shopping in a department store becomes a popular leisure activity once again.
In line with the prevailing trends that are expected to be seen across the Malaysian retailing industry during the forecast period, the leading players in department stores are expected to focus far more heavily on their online operations. The population of Malaysia is increasingly interested in buying a wide range of products online, with many having picked up his habit when department stores were unable to open during the COVID-19 pandemic.
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Understand the latest market trends and future growth opportunities for the Department Stores industry in Malaysia with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
Key trends are clearly and succinctly summarised alongside the most current research data available. Understand and assess competitive threats and plan corporate strategy with our qualitative analysis, insight and confident growth projections.
If you're in the Department Stores industry in Malaysia, our research will help you to make informed, intelligent decisions; to recognise and profit from opportunity, or to offer resilience amidst market uncertainty.
Department stores are chained or independent retail outlets that usually exceed 2,500 sq metres of selling space, are typically in high-street or shopping mall locations, and have a primary focus on selling a range of non-food/drink/tobacco merchandise across several categories in different departments. Department stores usually have a mid-to-upper price positioning. Example brands include Macy’s, Marks & Spencer, and Takashimaya.See All of Our Definitions
This report originates from Passport, our Department Stores research and analysis database.
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