Purchasing power of consumers recovers: Aprindo

Purchasing power of consumers recovers: Aprindo

JAKARTA (JP): The country's retail sector has almost returned
to precrisis level thanks to an improvement in the country's
economy, according to the Association of Indonesian Retailers
(Aprindo).

The retail association's vice chairman, Hardy Lewa, said here
on Friday monthly sales recorded by its members had grown by
between 30 percent and 50 percent since early this year.

He acknowledged that the significant increase in the value of
the sales was partly due to an increase in prices. "But in terms
of quantity, the volume of goods sold has already reached 70
percent of the precrisis level," he added.

He said the improvement in the economy, which had created more
job openings for the unemployed and salary increases had
contributed to a significant increase in consumer's buying power.

Tutum Rahanta, the retail association's treasurer, estimated
that the country's retail sales, excluding those of traditional
vendors, could reach Rp 40 trillion.

Last year, retail sales rose to Rp 25 trillion from Rp 18
trillion in the previous year.

Aprindo currently groups about 300 retailers nationwide,
including major chains Matahari, Ramayana, Hero, Pasaraya,
Sarinah, Ace Hardware and Agis.

Together they control about 60 percent of the modern retail
market nationwide.

The huge potential market plus the steady recovery of consumer
confidence has not only pleased local retailers but also
motivated foreign retailers to further extend their presences
here.

The Netherlands-based wholesaler Makro, for example, which
recently opened a renovated outlet in Jakarta and a new store in
Medan, North Sumatra, to total 10 outlets, said it planned to
open three outlets per year in the future.

French supermarket chains Carrefour has also expanded its
business here with the opening of two new outlets in Jakarta
earlier this year.

More foreign retailers, such as Germany's Metro International
AG and British hypermarket chain Tesco, are expected to enter the
country in the near future.

Aprindo's executive director, Kustarjono Prodjolalito, said
foreign players were welcome to come here as long as they
followed the regulations and did not carry out their business in
such a way that would especially harm local small- and medium-
scale stores.

"At the moment, their presence has not posed a serious threat
to us. But, in the near future they will certainly become killer
competitors," he said.

He said in order to anticipate the impending head-to-head
competition with foreign retailers, some of local major retailers
might expand their business into the hypermarket or minimarket
sector.

He said local minimarket chain Indomart, for example, had
opened 400 outlets and planned to open another 200 this year,
while wholesaler chain Alfa targeted to open 75 outlets
nationwide this year.

Indonesia will host the 10th annual Asian Retailers Convention
& Exhibition in September next year, an event which will be
organized by Aprindo. (cst)