Business slows, retailers book lower year-end sales<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Holiday shoppers are spending less money this year due to
\nweaker consumption power, the Association of Indonesian Retailers
\nsaid on Wednesday, adding that total retail sales would likely
\nmiss the 2002 target.<\/p>\n
\"Compared to last year, retail sales ahead of the holidays
\naren't so good anymore. Business is slowing down,\" the
\nassociation's spokesperson Rudi Sumampow told The Jakarta Post.<\/p>\n
According to him, consumers lack the spending power to match
\nlast year's sales figures during the Idul Fitri and Christmas
\nholidays.<\/p>\n
He gave no comparative figure but estimated overall sales to
\nhave grown by just 10 percent this year. This is half the growth
\nrate the association had expected, he said.<\/p>\n
\"We expected that retail sales could grow to double the annual
\ninflation rate but now it's unlikely with this condition.\"<\/p>\n
The annual inflation rate stood at 10.82 percent as of last
\nmonth. Inflation undermines consumer spending power if the rate
\nout paces growth in income.<\/p>\n
But analysts said this year's rate was relatively modest given
\nthat the government raised fuel prices, electricity and telephone
\nrates simultaneously last January.<\/p>\n
New pricing schemes, introduced in that month, require fuel
\nprices to move in line with international market prices. Power
\nrates increase by an average of 6 percent every quarter.<\/p>\n
Letting the market decide fuel prices, and the one-time
\ndecision on the power rate hike has helped avoid the previous
\njump in inflation every time the government announced plans to
\nraise fuel or power rates.<\/p>\n
Still, Rudi blamed the triple price hike in January for
\nthe plunge in consumer spending. Although the impact on inflation
\nhas been modest, consumer' purchasing power took a direct hit
\nfrom the routine price hikes.<\/p>\n
\"People are more selective now in spending their money,\" Rudi
\nremarked.<\/p>\n
This condition, he added, has forced manufacturers to cut back
\non production for fear of oversupply. This has affected mainly
\nfood producers, he said.<\/p>\n
Rudi said retail sales in key tourist destination like Bali,
\nYogyakarta and Jakarta have also weakened following the Bali
\nbombing in October.<\/p>\n
\"Retail sales in key tourist areas are our barometer to gauge
\ngrowth in the overall retail business,\" he explained.<\/p>\n
The bomb blast that occurred in one of Bali's nightspots
\ncrowded with foreign tourists, has shattered the country's
\ntourism industry.<\/p>\n
Arrivals of foreign tourists, who make up the bulk of tourism
\nretail sales, plunged with no sight of a recovery as yet.<\/p>\n
Rudi said that retail sales in Bali fell by 50 percent a month
\nafter the bombing.<\/p>\n
Weaker consumption power has also cast a pall over sales of
\nelectronic goods this year.<\/p>\n
The Association of Electronics Producers (Gabel) estimated
\nthat sales of electronic goods would grow by just 10 percent this
\nyear, far below the initial target of 25 percent.<\/p>\n
It recorded a slump in the second half when sales should have
\npicked up. The association chairman Lee Khang-hyun said on
\nTuesday that sales of television sets and refrigerators normally
\nsoar during the festive season.<\/p>\n
According to him, people were probably saving their money for
\nholiday trips after the government extended the Idul Fitri and
\nChristmas holidays.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/business-slows-retailers-book-lower-year-end-sales-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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