PT Metro Supermarket Realty Tbk (MTSM) has closed down its trading business due to a steady decline in customers over the last five years, a company official said Saturday.
"The supermarket business has been really slow in the last five years due to a decrease in the number of consumers," MTSM director Arief Amin said in a report to the Indonesia Stock Exchange on Friday.
Arief said the situation had hurt the company's net income, making it impossible for the company to cover its operational costs. "This is why we closed down our supermarkets."
MTSM has three divisions, real estate, property management and supermarkets.
In a public disclosure on Dec. 10, 2007, MTSM's management said last year's profit had fallen short of expectations due to sky-rocketing oil and fuel prices and an increase in natural disasters, all of which had influenced consumer purchasing power.
Former chairman of the Indonesian Retail Traders Association, Handaka Santosa, who was replaced Friday by Benyamin Moelo following the end of his term, said purchasing power was not the only determining factor in the retail industry.
"Numerous other smaller supermarkets, including Tip Top and Hari Hari, are still surviving. It may be that (MTSM's) supermarket division is lacking innovation," he told The Jakarta Post.
"It needs to take into account consumer comfort, promotion and availability of products."
"Modern consumers are now more concerned about health," he said, adding that the industry needed to adapt to the changing needs of families, many of which are adopting healthier lifestyles. (lva)