RI retailers trying to modernize, branch out<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Major retailers in the country are planning big expansions of
\ntheir businesses to get a larger chunk of the country's expanding
\neconomy.<\/p>\n
Alfamart, a minimarket operator since 1999, is leading the
\ncharge by planning to increase its outlets by 80 percent from
\n1,000 to 1,800 locations in the country.<\/p>\n
\"The momentum can't be stopped, we have to continue
\nexpanding,\" said Djoko Susanto, a director of PT Sumber Alfaria
\nTrijaya, which owns Alfamart.<\/p>\n
The company's ultimate goal is to establish between 5,000 and
\n10,000 minimarkets here.<\/p>\n
The decision to expand, according to Alfamart managing
\ndirector Pudjianto, \"will eventually sideline traditional
\nstores\".<\/p>\n
Competitor Indomaret, meanwhile, has also revealed its plans
\nthis year to open 600 more outlets, boosting its stores to 1,600.<\/p>\n
The presence of the modern markets, however, often violate
\nBylaw No. 2\/2002 issued by the Jakarta administration on private
\nmarkets in the capital, which regulates pricing policies, a
\nminimum distance from traditional markets and cooperation with
\ninformal businesses.<\/p>\n
Supermarkets and hypermarkets are also planning to rapidly
\nexpand their presence, with one of the operators, Hypermart,
\nlooking to triple its outlets to 18 this year.<\/p>\n
Industry analyst Yongky Surya Susilo of AC Nielsen said the
\nretailers growth plans for this year were \"realistic\".<\/p>\n
\"The number of retail outlets in Indonesia, which is
\n(estimated to be) 1.75 million, is the second-biggest in the Asia
\nPacific after China with 3.2 million,\" he said.<\/p>\n
A study by MasterCard International in February said Indonesia
\nwas forecast to top the year-on-year retail sales growth for the
\nfirst semester with 16.9 percent, compared to China's 12.75
\npercent.<\/p>\n
Yongky explained that Indonesia's consumer spending on 47
\nmajor goods increased by 13.8 percent last year.<\/p>\n
The Association of Indonesian Retailers (Aprindo) has
\nestimated that total retail sales in 2004 reached about Rp 300
\ntrillion (US$31.6 billion).<\/p>\n
The recent fuel price hike, according to Yongky, will not
\naffect retail spending as it was still predicted to grow by
\nbetween 15 percent and 20 percent this year.<\/p>\n
Aprindo data shows that sales in 2,720 modern stores
\nnationwide experienced a 28 percent growth from Rp 35 trillion in
\n2003 to Rp 45 trillion in 2004.<\/p>\n
Yongky said although spending increased at both traditional
\nand modern retailers, the growth at modern retailers was 12
\npercent higher than at traditional markets.<\/p>\n
At the current growth rates, the market share of traditional
\nstores, currently at 70 percent, would drop by 2 percent per
\nyear, he said, adding that the strong growth in the modern retail
\nsector was because customers obtained more \"service and value\"
\nthere.<\/p>\n
The most recent data from AC Nielsen revealed that the share
\nof consumer spending at modern markets has increased by 40
\npercent from 21.8 percent in 2000 to 30.4 percent in 2004. (002)<\/p>",
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