Matahari to add fewer shops in 2006

Matahari to add fewer shops in 2006

JAKARTA: PT Matahari Putra Prima, Indonesia's biggest retailer by sales, said it plans to open fewer stores next year, anticipating slower consumer spending after the government raised household fuel prices last month.

Ten hypermarkets and nine department stores will be added next year, compared with 13 hypermarkets and 10 department stores budgeted for this year, director Danny Kojongian said in a telephone interview from the company's headquarters at Karawaci, Tangerang, west of Jakarta, on Wednesday.

"It's still early to say, but we expect to see a slowdown in consumer spending next year on lower purchasing power," Kojongian said. "Matahari's sales for the Idul Fitri season in October and early this month were good. Hopefully Christmas sales will be good. But things may be quiet after New Year."

The government on Oct. 1 more than doubled fuel prices sold to household users to prevent fuel subsidies draining the nation's coffers. The increase, which sent the on-year inflation to a six- year high in October, left consumers in Indonesia with less money to spend.

A survey released earlier this week by Bank Indonesia showed consumer confidence in October dropped to the lowest level since August 2003. -- Bloomberg