Malaysian Consumers Remain Cautious Despite Improving Economic Conditions

Malaysian consumers are expected to remain selective with their spending despite improving economic conditions, with households increasingly prioritising necessities and looking for cheaper alternatives.

BIMB Research said consumers are shopping less frequently, comparing prices more closely and making greater use of discounts, vouchers and lower-priced options.

Consumers Trade Down as Cost Concerns Shape Spending

The shift is particularly visible in consumers moving towards generic brands and essential purchases while cutting back on discretionary spending. Consumer staples earnings rose 27.8 per cent year-on-year, compared with a 10.3 per cent decline in consumer discretionary earnings.

CIMB Research expects affordable retailers and convenience operators to remain relatively resilient as shoppers continue to prioritise value and daily necessities. 

However, analysts expect consumer activity to strengthen during the second half of 2026, supported by government assistance, targeted subsidies and tourism-related spending.

RGM forecasts retail sales growth to improve to 4.7 per cent in the third quarter, while CIMB expects a stronger recovery in the final quarter.