The Malaysia Retail Chain Association (MRCA) has welcomed the tabling of Budget 2027, lauding the government’s efforts to ease operating pressures on small and medium enterprises (SMEs), safeguard the people’s well-being, and drive regulatory reforms in e-commerce.
MRCA noted that while the budget sends a positive policy signal, the key over the coming year lies in effective implementation to genuinely improve the business operating landscape, restore consumer confidence, and sustain retail sector growth.
Government lauded for addressing SME concerns
In a statement today, MRCA president Dato’ Liew Bin expressed heartfelt appreciation to the government for hearing the plight of SMEs regarding the minimum wage review, specifically granting a deferment on the implementation of the RM2,000 monthly minimum wage for eligible SMEs.
He pointed out that the retail sector is labour-intensive, with businesses having to shoulder substantial rental, utility, logistics, inventory, and other operating overheads on top of payroll costs.
For margin squeezed SMEs, a sharp spike in labour costs over a short timeframe would severely strain cash flow, hiring, and expansion plans, Liew said.
While MRCA fully supports enhancing workers’ earnings and living standards, it stressed that wage increments must go hand in hand with productivity gains.
The association urged the government to provide greater clarity on the exemption criteria and operational guidelines, while assisting businesses in ramping up efficiency through digitalisation, automation, and upskilling initiatives to achieve a win-win outcome for employers and employees alike.
Proposed E-Commerce Bill a welcome move
MRCA also welcomed the government’s plan to table the E-Commerce Bill, describing it as a crucial step towards fostering a healthy digital economy, protecting consumer interests, and upholding fair market competition.
“We are not against foreign investment, nor are we opposed to e-commerce growth. Online and brick-and-mortar retail can complement each other to expand the market pie,” MRCA stressed.
However, the association emphasised that all businesses operating in Malaysia, domestic or foreign, must strictly adhere to statutory requirements regarding taxation, product safety, consumer protection, and commercial compliance.
MRCA recommended that the proposed legislation clearly delineate the liabilities of e-commerce platforms and merchants, tighten oversight on non-compliant goods, enhance seller verification and dispute resolution mechanisms, and enforce tax transparency to ensure cross-border sellers compete on an equal footing with local merchants.
Concurrently, MRCA said the government should scale up digital adoption support for domestic SMEs, helping them develop omnichannel capabilities, strengthen brand equity, and tap overseas markets.
“We welcome competition, but it must be fair. A sustainable e-commerce ecosystem should not come at the expense of physical retail; it must create mutual value for consumers, merchants, and the wider economy,” said MRCA.
Cash aid helps buoy retail demand
MRCA commended the continuation of targeted cash assistance through Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) for eligible households. These handouts will help preserve essential purchasing power and generate footfall and sales for participating neighbourhood retailers.
Nonetheless, the association cautioned that higher financial aid does not automatically translate into broad-based growth across all retail segments. The government must continue to keep a close watch on household living costs, business operating expenses, and overall consumer sentiment to ensure these measures deliver tangible economic benefits.
With convenience stores, pharmacies, and wet markets being vital everyday retail touchpoints for beneficiaries, MRCA urged the government to incorporate these segments into the expanded panel of appointed SARA merchants.
The Rakyat should be able to utilize their SARA benefit at any place at their convenience, be it convenience stores, pharmacies, mini markets or supermarkets etc.
Driving sustainable retail growth
Looking ahead, MRCA cautioned that the retail industry continues to grapple with rising overheads, including wages, rental, logistics, and inventory costs—alongside heightened competition from online players.
The association called on the government to broaden access to SME financing, digital adoption, artificial intelligence (AI) integration, talent upskilling, and homegrown brand development, while maintaining regular stakeholder engagements to assess policy outcomes.
Overall, MRCA acknowledged the positive signals delivered by Budget 2027 in key areas, but stressed that the true measure of the budget’s success lies beyond allocations and policy announcements, it must translate into private investment, job creation, productivity gains, and robust consumption.
“We stand for fair remuneration for workers while ensuring businesses remain viable to create jobs; we embrace the digital economy while demanding a transparent and level playing field,” Liew Bin said.
“Only when the government, businesses, workers, and consumers benefit together can Malaysia’s retail sector thrive sustainably and contribute more meaningfully to national economic growth.”
