Malaysia eases restrictions on foreign operators

Planet Retail 8 June 2007

The Malaysian Minister of Domestic Trade and Consumer Affairs, Shafie Apdal, in a recent interview has said that the country is preparing to ease restrictions on foreign hypermarket operators, "We like competition, it's good for the consumers." According to Shafie, Wal-Mart has signalled that it is interested in setting up stores in Malaysia and the ministry is talking to Metro. In January 2004, new hypermarkets were banned in the Kuala Lumpur, Johor Bahru and Penang areas for five years. Operators wanting to open in other areas had to apply for permits two years in advance. The result is 50 foreign hypermarket outlets serving a population of more than 26 million.

After taking over the portfolio in March 2004, Shafie approved 147 foreign retail outlets last year, including 17 hypermarkets and 12 superstores. The ministry has approved 59 foreign outlets this year. Foreign retailers in Malaysia "are making money, otherwise they won't be asking for more sites," according to Shafie. "We may have 26 million people but 60% to 70% of that is really those people who have high purchasing power and can turn the retail sector into a boom area." Size restrictions on hypermarkets may be relaxed to allow them to fill vacant retail space in shopping complexes that are often too expensive for locally owned mini-market or supermarket operators, he added. The ministry is seeking approval from the Cabinet for the new retail rules and expects a decision "very soon," he said. Kevin Gardner, a spokesman for Wal-Mart, has stated that the company has nothing to announce regarding Malaysia. Metro is unlikely to enter Malaysia in the near future as it takes "at least six months to build a store and to prepare the infrastructure," according to spokesman Jurgen Homeyer.

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