TEMPO Interactive, Jakarta: Retail industry activities until next year are regarded as not yet prospective because consumers’ purchasing power is still weak.
The retail business is still categorized as a business of high costs and low profits.
“In spite of growth, it hasn’t been profitable for business players,” said Surjadi Sasmita, Daily Chairman of Indonesian Garment and Accessories Suppliers Association (APGAI), yesterday (8/11).
He said that in order to survive, retail entrepreneurs compete as regards price.
The result is that retail business become unhealthy because profits keep decreasing.
In addition, said Surjadi, low profits are not only suffered by entrepreneurs, but also suppliers and producers.
Handaka Sentosa, Head of the Retail Businesspeople’s Association, said that due to the public’s low purchasing power, entrepreneurs carry out efficiencies and minimize production costs.
“Not always by sacrificing margin, but also by optimizing workers,” he said.
Handaka cited that whereas one worker used to be responsible for supervising an area of 15 square meter area, now they had to supervise 17 square meters.
He is positive that by the end of this year, retail businesses will book a higher turnover compared to last year’s total turnover.
“We are still optimistic that sales in 2006 can be 20 percent higher than in 2005,” said Handaka.
This is because until September medium-scaled retail entrepreneurs recorded a rise in sales of between 12 and 17 percent.
Poppy Darsono, APGAI General Chairperson, is urging the government to pass the Presidential Regulation on Modern Markets.
The policy will arrange the entrepreneurs in modern markets; property, supplying industry and other business related to retail.