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)