The Malaysian Insight

THIS year, Vicknesh Shanmuganatham will not be buying any Christmas gifts for family members older than 15. The presents he buys will be for his own children and a few nieces and nephews he is close to.

“Last year, I bought some gifts for my adult siblings and other family members. But this year, I’m only buying for kids. We’re on a strict budget,” said the 36-year-old father of two from Klang.

Vicknesh’s tightened Christmas shopping budget was echoed by the four middle and working class families The Malaysian Insight spoke to from the Klang Valley, Penang, Sabah, and Sarawak who will be ushering the festival next week.

Like Vicknesh, they will not be spending more because prices for food, clothes, toys, and decorations are still high despite there being no goods and services tax (GST).

The mood, however, is more upbeat among mall operators and retailers, who say they are expecting to see a slight increase in sales this Christmas season compared with the year before.

Others, however, are worried of the competition from online vendors.

“We have seen a generally positive response from shoppers this year at Queensbay Mall (Penang),” said assistant centre manager Lee Sue Ling.

“From January to November 2018, shopper traffic has shown steady improvement year-on-year. In addition to this, our well-noted festive decorations, especially for Christmas and Chinese New Year, continue to pull in the crowds,” Lee said.

GST or not, prices still high

When Pakatan Harapan took over federal power, it scrapped the unpopular GST which had levied a 6% tax on almost everything except a list of about 900 exempted goods, most of which was fresh food.

The government re-imposed the sales and services tax (SST), charged on manufacturers, importers, and some services.

The administration said that the consumer price index (CPI), a measure of inflation, was only 1.2 % from January to September, lower than 3.9% in the same period last year when Barisan Nasional was in power.

However, consumers like Aaron Ngui from Penang have not really seen a difference in prices between this year and the last.

“I feel it’s about the same. It’s about the seasonality of fresh produce. If the item is in season, then it will definitely be cheaper compared with when it is not,” said the 35-year-old consultant and father of two young children.

“I think I am spending about the same. Just set a budget and stick to it. It’s about how the budget is spent. For example, RM500 for everything, including gifts and necessities like food.”

Kam King Yun, a father of two from Kota Kinabalu, said his family does not splurge during Christmas.

“I’ll probably allow one of my children to take part in a gift exchange session at school. It won’t cost me more than RM50. The class teachers have set a limit of between RM20 and RM30 for each gift.”

Sarawakian Sally George, 42, on the other hand, believes on emphasising the spiritual and family aspects of the celebration.

“It’s the time to teach my young boys the religious and Biblical significance of Christmas. It’s not about buying new clothes or new shoes,” said the office administrator.

“Buying new clothes, shoes, or furniture have never been a thing in this family. We only buy food and drinks for the open house.”

Traders feeling the cheer

Tim Lee of Joeyness Floral Design said the company expects to see better profits and sales this year compared with last year because of the abolishment of GST.

“We were charged GST by our suppliers, but we couldn’t pass on the added cost to our consumers,” said the manager at his stall at the Bukit Tinggi mall in Klang.

“So we absorbed it. This year, we don’t have to pay, so we are expecting to do better,” said Lee, whose stall sells fresh flowers and toys and provides gift-wrapping services.

Jameson Yap of the SnJ Gift Store chain said he saw a slight increase in sales beginning in November for Christmas trees and decorations.

“It was slightly better than the same period last year. This is the time when companies usually come to buy decorations for their offices,” said Yap, who founded the chain with 11 stores nationwide.

“During the GST era, our sales dropped by 10% to 15% across all stores. We are positive we can regain those lost sales this year.”

At the Karamunsing shopping mall in Kota Kinabalu, store supervisor Melissa Melly said that business remains strong this year.

“GST or no GST, and now SST, the crowd coming to our shop remains strong. Most of the items sold at the shop are under RM50. When SST was implemented, almost all of the prices went down, “ she said.

For example, a packet of glitter stickers was priced at RM4.23 including GST, but the price has dropped to RM3.99.

But not every trader is in a festive mood. Luther Chu, who sells gadgets and computer accessories at a store in Kota Kinabalu, suspects that his declining sales are due to the increasing popularity of online shopping.

“About 10 years ago, I was able to sell up to 50 smartphones in a single day during this time of the year, not to mention PCs or laptops.

“Over the past five weeks – look around, there’s not many people around. Most of them would prefer browsing and not buying anything. The digital market remains strong, but barely anyone is coming to (physical) shops these days,” he said. – December 21, 2018.