The Malaysian Insight

AFTER being shuttered for more than 50 days, hardware stores now face a rocky road to recovery as sales have plunged by more than 90% from the economic impact of the coronavirus.

Like other businesses now struggling to restart, hardware stores have to endure inventory cost, rents, salaries and utilities.

But their problems are compounded by the fact that their biggest customers – construction sites – face their own problems resuming operations after the movement-control order (MCO).

The Kuala Lumpur and Selangor Hardware and Building Materials Merchants Association said the construction sector makes up 90% of their clients while residential customers make up the rest.

Shops are also worried about an oversupply of paints and brushes as they stocked up on these items in anticipation of Ramadan and the Hari Raya festival – a time when Muslims usually repaint their houses.  

Hardware stores are among the first type of non-essential trades allowed to reopen during the second phase of the MCO from April 1 to 14.

But after they reopened, most of their customers were homeowners undertaking self-repairs, said association chairman Chen Chiew Hong.

“But reopening is at least better than staying at home. If you’re not operating, it is still a heavy burden to pay the shop rent and salary,” Chen told The Malaysian Insight.

Stores are required to implement measures, including checking temperature of customers and employees, wearing masks, and maintaining social distancing while queuing.

The two-week MCO was imposed on March 18 to fight Covid-19, which has claimed 109 lives and infected 6,726 others.

The MCO is now slated to end on June 9.

However, starting last week Putrajaya allowed most businesses to reopen with the exception of those who depend on close physical contact and crowds.

Low Chung King, who owns a store in Kepong, Kuala Lumpur, said the MCO period was the most painful time for the industry as they were squeezed with zero sales but persistent demands from suppliers to pay off old debts.

“I could only take orders over the phone and then arrange for the delivery service to deliver the goods, but business was very limited,” said Low.

At the same time, wholesalers started issuing notices to pay up or they would not replenish supplies.

Low, who is also the association’s secretary, estimates that the monthly turnover of a small hardware store is RM300,000, and that of a medium-sized hardware store is RM500,000.

“This is a considerable amount. We have not been in business for more than a month but we have to pay for inventory, rent, salary and other expenses. Many hardware stores are worried about falling into financial difficulties.

“Although the government has provided loans to help small businesses, it takes time to be approved, and interest has to be repaid afterwards. Ultimately, you are on your own.”

Although sales in construction materials has only recovered by about 10%, Low said it’s better than nothing.  

Another worry is how to dispose of the large quantities of painting supplies ordered in February in anticipation of Ramadan and Hari Raya Aidilfitri.

“In years past, Muslims will paint or repair their homes before Hari Raya. Now we are worried about not being able to sell all the stock although some homeowners have bought supplies.” – May 12, 2020.