Continent to open third outlet in Jakarta

JAKARTA (JP): Promodes, the French business group that runs the Continent hypermarket outlets, plans to open its third store in Jakarta, disregarding not only the economic recession but also protests from local supermarket chains.

The latest Continent hypermarket will open on Wednesday at Plaza Cempaka Mas in the Cempaka Putih area in Central Jakarta. The US$5 million facility will take up a 10,000-square-metre basement space of the shopping mall.

Promodes director Jean Marc Pueyo said on Saturday that he was optimistic the retailing business would pick up with the strengthening of the rupiah against the U.S. dollar.

The higher rupiah exchange rate would strengthen people's purchasing power, he told a media briefing at Club Rasuna Kuningan, which is located near the first Continent outlet.

Promodes is the second and the most aggressive of the two French retail business group to tap the Indonesian market after Carrefour. It opened its first outlet in October 1998 at the peak of the economic recession and the second in Megamal Pluit in March.

It has a 65 percent stake in the joint venture PT Contimas Utama Indonesia. The remaining 35 percent equity is held by PT Sinar Kilat Buana of the giant Sinar Mas Group.

Continent's popularity among Jakarta shoppers arises from the huge discounts it offers on many of its products, prompting charges of dumping practices by established local supermarkets.

Kustardjono Prodjolalito, executive director of the Association of Indonesian Retailers, was quoted on Friday by Warta Kota daily as saying that both Continent and Carrefour were selling their products below manufacturers' prices.

This was a breach of business ethics and threatened traditional vendors and local supermarkets, he said.

Pueyo said the discounts benefit consumers, especially during the current economic crisis. "People will look for discounts when the economy is tumbling," he said.

Continent can undercut its competitors by trimming down its profit margins, Rudy Wirawan, manager of Continent at Pasar Festival in Kuningan, said. "We do this by promoting efficiencies in our operation, such as electricity usage," he said.(asa)