Bleak outlook for grocery spending
Evi Mariani, The Jakarta Post, Jakarta
Indonesia has experienced a bleak outlook in grocery spending since the economic crisis, with no sign of a strengthening in the short term, says an AC Nielsen report made available on Tuesday.
The report shows the grocery sales index of the first quarter at 102 percent, weakening from 109 percent the previous quarter.
The index measures retail sales volume of fast-moving consumer goods in shops -- traditional and modern -- in urban and rural areas throughout Indonesia, covering around 80 product categories like soap, washing detergent, shampoo, noodles, milk, biscuits and soft drinks, in thousands of brands and pack sizes.
The index is one of the tools that can reflect the progress of spending power and living standards among Indonesian consumers, as the products covered represent the everyday shopping basket of most households.
The results of the volume survey are indexed to precrisis (mid-1997) levels.
Therefore, the current 102 percent index means that the grocery volume purchased during the first quarter is 2 percent higher than that of mid-1997.
The report also provides a quarterly index from March 2001, presenting a fluctuating index that ranges from 101 percent to 109 percent. It shows an annual trend in which spending slumps in the first quarter then steadily climbs in the following quarters, peaking in the fourth, when people spend more money on food products for the celebration of Christmas, New Year and Idul Fitri, when it has occurred in that quarter.
However, from March 2001 to March 2003, the index never rose above 109 percent, despite the fact that the population grew by about 1.7 percent per year, according to AC Nielsen.
The survey shows that grocery prices have almost tripled as compared to their precrisis level.
The index excludes cigarette spending because "the share of cigarettes sales is too large, so it would affect the index greatly," said AC Nielsen director for client services Teguh Yunanto.
"For example, we once found that cigarette sales accounted for 40 percent of a shop's total sales," he added.
Another AC Nielsen report, titled Asia Retail and Shopper Trends 2003 shows that in Indonesia traditional trade remained dominant, amounting to 74.6 percent of the total trade share in 2002.
However, according to AC Nielsen's retail services director Yongky S. Susilo, the trade share of modern stores, such as hypermarkets, supermarkets and minimarkets has grown healthily by 12 percent per year, as they have implemented a better marketing strategy than traditional markets.