Mr. DIY Malaysia gears up for challenging 2023

In its annual report, Malaysian market leader Mr. DIY highlighted muted economic prospects in Malaysia, the acceleration of prices, as well as geopolitical conflicts as factors that could affect the retail scene. Nevertheless, company officials see pockets of opportunities amid the challenging environment, and said that the homegrown retail chain will “be responsive, agile and flexible”. 

The World Bank earlier warned that the global economy could be teetering on the brink of a recession this year, projecting growth to be at 1.7 per cent owing to inflationary pressures, deteriorating financial conditions, rising geopolitical uncertainties, and others. 

In Malaysia, the government forecasts GDP to grow at a more tempered 4.5 per cent, coming off a 20-year high of 8.7 per cent last year. Inflation is seen to hit between 2.8 and 3.8 per cent – a wider band from the Malaysian finance ministry’s 2.8-3.3 per cent forecast in October 2022. 

Meanwhile, as tensions in Ukraine and Taiwan add pressure to world commodity and food prices, governments are looking to raise interest rates to address inflationary effects. This in turn directly impacts on the spending power of shoppers, Mr. DIY noted. 

To face the challenging retail environment, Mr. DIY has a “roadmap for sustainable growth” that is “underpinned by lower-cost, highly scalable and profitable, strong cash-generative business model, further supported by a measured and data-reliant new store opening programme”. 

Observing that Malaysian shoppers have been adjusting to rising inflation, burgeoning costs and increasing interest rates by shifting to value and white label brands, Mr. DIY chief operating officer Adrian Ong said the retailer is poised to take advantage of this. 

“We have, in recent years, successfully partnered with global manufacturers to create white-label products that … offer customers a higher price-to-quality value proposition compared to third-party branded products,” Ong said. 

To get the most out of “measured” expansion plans, the company will be focusing on adding more home improvement stores, which are its growth drivers. Of the 180 branches planned for opening this year, at least 125 will be Mr. DIY and Mr. DIY Plus outlets, Ong said, while 35 will be Mr. DIY Express stores. Only 20 of the planned outlets will be Mr. Toy and Mr. Dollar stores, he added. 

Acknowledging that Mr. Dollar is “still in gestation”, Ong said that the fixed-price store needs to build brand recognition, achieve scale, and…