Matahari to review expansion plan

Matahari to review expansion plan

JAKARTA : Indonesian retailer PT Matahari Putra Prima said Monday it will review its expansion plan this year after the government recently raised electricity and telecommunication tariffs and fuel prices.

Matahari spokesman Danny Konjongian said the hikes will raise the company's cost of operation and will in turn affect its sales this year. However, he refused to provide figures.

Matahari initially had planned to expand its businesses by setting up another seven department stores and seven supermarkets this year in a bid to boost its sales.

"But the price hikes have forced us to review the plan," he said.

The government raised fuel prices by between 3 percent and 23 percent, telecommunication tariffs by an average of 15 percent, and electricity tariffs by 6 percent, effective Jan. 2.

Konjongian said Matahari will strive to increase its efficiency to mitigate the impact of the hikes.

"It's a challenge for us," he said, adding that if the plan to cut costs is successful, Matahari expects to go ahead with its expansion plan.

Matahari has 77 department stores and 64 supermarkets in 38 cities in Indonesia. --Dow Jones