Association: 3.9 million small grocery shops remain as modern retail erodes the market
Jakarta (ANTARA) — The Indonesian Street Vendors Association (APKLI) reports that the number of traditional small grocery shops throughout Indonesia continues to decline, with approximately 3.9 million units remaining by the end of 2025.
APKLI General Chairman Ali Mahsun stated in Jakarta on Friday that this figure represents a drastic decrease from 6.1 million in 2007, meaning more than 2.2 million small grocery shops have closed due to rapid modern retail expansion and more lenient licensing policies.
During an audience with Cooperatives Minister Ferry Juliantono in Jakarta on Thursday (26 February 2026), Ali emphasised that modern retail policies must not come at the expense of grassroots businesses.
“We are not hostile to modern retail, but we want the people’s economy to circulate, and we want to reclaim economic sovereignty for the people. Village economies should benefit villages, sub-district economies should benefit sub-districts,” he said.
At this meeting, APKLI proposed that government regulations governing the organisation of traditional markets, shopping centres, and modern shops be reinforced. Ali highlighted the importance of enforcing classification rules for minimarkets with an area under 400 square metres, supermarkets between 400 and 5,000 square metres, and hypermarkets over 5,000 square metres, as well as implementing zoning that considers social and economic impacts on small traders.
The regulation of shopping centres, supermarkets, and modern shops is governed by Government Regulation No. 29/2021 concerning Trade Operations.
Government Regulation 29/2021 stipulates that the establishment of shopping centres or supermarkets must take into account the social and economic conditions of the community, the existence of traditional markets, and SMEs in the area. The location must also comply with regional spatial planning guidelines. Additionally, modern shops are required to partner with SMEs in product marketing.
Ali also highlighted the spirit of the 2015 Economic Policy Package, which aimed to simplify modern retail licensing without compromising the competitiveness of small businesses.
According to him, since this policy was implemented, more than 2 million small grocery shops have closed due to simplified business licensing, which has also facilitated modern retail expansion.
During the audience, APKLI also supported the government’s efforts to strengthen the 83,000 Merah Putih village/sub-district cooperative programme as a local economic hub.
“The Merah Putih cooperative ecosystem with small grocery shops and food businesses will become a source of enormous economic strength,” Ali said.
During the meeting, the Cooperatives Minister stated that the Ministry will coordinate with relevant parties, such as the Ministry of Trade and local governments, to strengthen supervision and enforcement of modern retail regulations.
“We will submit APKLI’s proposals for review with representatives from the government association of district/city administrations throughout Indonesia and regional heads so we can address this issue as prudently as possible,” Ferry said.