Experience-driven concepts to anchor Malaysia’s retail resilience

Malls are evolving into lifestyle hubs, with a focus on experiences rather than products.

Malaysia’s retail market is expected to remain resilient despite a competitive operating environment and cautious consumer sentiment, as spending patterns continue to shift from product-led purchases toward experiences, according to Savills Malaysia.

In its latest market outlook, Savills said rising living costs have made consumers more price-conscious, but overall demand remains intact. Instead of traditional retail spending, shoppers are increasingly prioritising lifestyle, wellness, dining and social activities, prompting shopping malls to reposition themselves as multi-functional lifestyle destinations rather than purely transactional spaces.

“Retail malls are increasingly viewed as lifestyle hubs that encourage longer dwell times and repeat visits,” Savills noted, adding that experiential offerings have become a key differentiator in attracting and retaining footfall.

The consultancy highlighted the emergence of new retail development concepts that reflect this shift in consumer behaviour. The Campus in Ampang, Kuala Lumpur, was cited as a prime example, featuring a curated mix of food and beverage outlets alongside sports and recreational facilities designed to create a community-oriented environment.

Savills observed that while demand remains steady, the retail market continues to face headwinds. Mall operators and retailers are navigating rising operating costs, upcoming utility tariff adjustments, and the expansion of the Sales and Service Tax (SST) scheduled to take effect in July 2025, all of which have contributed to cautious market sentiment.

However, the report noted that government intervention has helped to mitigate some pressure on consumers. Measures such as the BUDI95 fuel subsidy and a one-time RM100 Sumbangan Asas Rahmah (SARA) credit have provided short-term relief, while Bank Negara Malaysia’s recent policy rate cut to 2.75% is expected to ease financial conditions for households and businesses.

According to Savills, these initiatives, combined with continued infrastructure improvements and enhanced transport connectivity, should help underpin retail activity in the medium term.

“While consumers are likely to remain value-driven and selective, the market is expected to stay resilient,” Savills said, adding that adaptability will be crucial for retailers navigating evolving expectations.

Looking ahead, Savills emphasised that retailers and mall operators who remain flexible — by curating experience-led tenant mixes and responding quickly to lifestyle trends — will be better positioned to sustain footfall and performance in a competitive retail landscape.