Continent to open third outlet in Jakarta

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)