Promodes opens retail operation despite crisis
Promodes opens retail operation despite crisis
JAKARTA (JP): France's Promodes Group will push forward with
expansion plans in the country despite the ongoing economic and
political crises, its country representative said on Monday.
Jean-Luc Montembault said it would open its third US$5 million
hypermarket retail operation in Jakarta at the end of July.
"Indonesia is among a few countries where this kind of
business will develop in the future," he announced at a news
conference following the grand opening of the firm's second
hypermarket operation at Pluit Megamal in North Jakarta.
He was convinced the hypermarket retail business would survive
the economic crisis because it provided quality products at
discounted prices.
"During a crisis, customers want a discount system."
Concerning political uncertainty, Montembault said: "We have
already calculated the risk."
Indonesia is scheduled to hold a general election on June 7,
touted as the first fair and free polls after 30 years under the
authoritarian rule of Soeharto. The prospect of elections has
raised jitters among many citizens in the wake of bloody unrest
and rioting in many areas nationwide. Disturbances have often
been marked by looting and arson of retail outlets.
The 19-month-old economic crisis has catapulted about half of
the country's more than 200 million population into poverty and
led to massive layoffs in major cities like Jakarta, with both
the banking and manufacturing sectors in serious trouble.
The French retail giant, established in 1961, now has various
retail operations in Europe, South America and Asia, particularly
Indonesia and South Korea.
The group opened its first retail operation in Indonesia last
year by forming a joint venture with PT Sinar Kilat Buana, a
retail unit of the giant Sinar Mas Group, called PT Contimas
Utama Indonesia. The French firm owns 51 percent.
Promodes, the second French retail chain to operate in
Indonesia after Carrefour, provides more than 15,000 different
products at discounted prices in a shopping area covering about
8,000 square meters.
Its first hypermarket operation outlet, called Continent,
opened in South Jakarta last October.
Several supermarket operations have criticized its presence in
the country, alleging Continent operated on a dumping strategy by
selling its products below manufacturer prices.
Montembault denied the allegation and said the company was
merely slashing profit margins in the hope it would be
compensated by large sales volume.
"We'll keep our low margin strategy," he said. (rei)