The Malaysia Retail Chain Association (MRCA) has welcomed Budget 2027, highlighting the government’s efforts to ease operating pressures on small and medium-sized enterprises (SMEs), protect household well-being and introduce regulatory reforms for e-commerce.
However, the association stressed that effective implementation will be essential to improving business conditions, restoring consumer confidence and sustaining growth in Malaysia’s retail sector.
Minimum Wage Deferment Offers Relief to SMEs
MRCA president Dato’ Liew Bin expressed appreciation to the government for addressing SME concerns over the minimum wage review, particularly through the deferment of the RM2,000 monthly minimum wage for eligible SMEs.
He noted that the retail sector is labour-intensive, with businesses facing substantial costs for rent, utilities, logistics, inventory and other operating expenses in addition to payroll.
For SMEs operating on tight margins, a sharp increase in labour costs over a short period could place considerable pressure on cash flow, recruitment and expansion plans.
While MRCA supports efforts to improve workers’ earnings and living standards, it emphasised that wage increases should be accompanied by productivity gains.
The association called for clearer exemption criteria and implementation guidelines, alongside greater support for businesses to improve efficiency through digitalisation, automation and employee upskilling. These measures would help balance the needs of employers with the goal of improving workers’ welfare.
Proposed E-Commerce Bill Must Ensure Fair Competition
MRCA also welcomed the government’s plan to table the E-Commerce Bill, describing it as an important step towards strengthening Malaysia’s digital economy, protecting consumers and promoting fair market competition.
The association said online and physical retail businesses could complement one another and expand the overall market, adding that it did not oppose foreign investment or the growth of e-commerce.
However, MRCA stressed that all businesses operating in Malaysia, whether domestic or foreign, should comply with the country’s requirements on taxation, product safety, consumer protection and commercial practices.
It recommended that the proposed legislation clearly define the responsibilities of e-commerce platforms and merchants, strengthen oversight of non-compliant goods, improve seller verification and dispute resolution mechanisms, and enforce tax transparency.
These measures would help ensure that cross-border sellers compete fairly with local retailers.
MRCA also urged the government to expand digital adoption support for domestic SMEs, enabling them to develop omnichannel retail capabilities, strengthen their brands and reach overseas markets.
The association emphasised that a sustainable e-commerce ecosystem should benefit consumers, merchants and the wider economy without undermining physical retail businesses.
Cash Assistance Could Support Retail Sales
MRCA commended the continuation of targeted cash assistance through Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) for eligible households.
The association said these measures could help preserve essential purchasing power while supporting customer traffic and sales at participating neighbourhood retailers.
However, it cautioned that increased financial assistance would not automatically generate broad-based growth across all retail segments. The government should continue monitoring household living costs, business operating expenses and consumer sentiment to ensure the measures deliver tangible economic benefits.
MRCA also called for an expansion of the appointed SARA merchant network to include more everyday retail outlets, such as convenience stores, pharmacies and wet markets.
This would give beneficiaries greater flexibility to use their SARA assistance at convenient locations, including convenience stores, pharmacies, mini-markets and supermarkets.
Retailers Face Rising Costs and Online Competition
Looking ahead, MRCA noted that retailers continue to face rising operating costs, including wages, rental, logistics and inventory expenses, alongside intensifying competition from online businesses.
To support sustainable retail growth, the association urged the government to widen access to SME financing and digital adoption programmes, encourage the integration of artificial intelligence (AI), strengthen talent development and support homegrown brand building.
It also called for regular engagement between the government and industry stakeholders to assess policy outcomes and ensure that support measures address businesses’ evolving needs.
Effective Implementation Key to Retail Growth
While Budget 2027 sends positive signals for the retail sector, MRCA stressed that its success should ultimately be measured by tangible outcomes beyond financial allocations and policy announcements.
These include stronger private investment, job creation, productivity improvements and resilient consumer spending.
Liew said the industry supported fair remuneration for workers while emphasising the need to keep businesses viable and capable of creating jobs. He added that embracing the digital economy must go hand in hand with transparent regulations and fair competition.
MRCA said cooperation between the government, businesses, workers and consumers would be essential to ensuring Malaysia’s retail sector remains competitive, grows sustainably and contributes more meaningfully to the national economy.
