Retail consumer goods sales continue to grow

Retail consumer goods sales continue to grow

JAKARTA (JP): Indonesia's consumer-led recovery continues its
upward trend with retail sales of fast moving consumer goods
almost returning to their pre-crisis levels, according to the
findings of a survey conducted by ACNielsen.

Advertising, particularly on TV and in newspapers, has also
shown strong growth and is fueling demand for consumer products
in retail outlets, the research firm said in a statement.

"Consumers are spending more on packaged consumer goods and
there is a dramatic increase in sales of consumer durables such
as cars, motorcycles and household appliances," said Farquhar
Stirling, the managing director of ACNielsen Indonesia.

The research company reported household expenditure levels
have increased since last year, with A-class spending up from 11
percent to 15 percent and B-class spending up from 14 percent to
17 percent.

"Now 32 percent of consumers in the major cities are in the
AB-category -- what we might call Indonesia's emerging middle-
class," Stirling said. "This reflects two things -- greater
consumer spending power and to a lesser extent inflation," he
added.

This increased spending power is seen in ACNielsen's Retail
Sales Index, which has recovered to its 1997 level before the
economic crisis shattered the Indonesian economy.

"Our index for packaged food products has reached 98, and 99
for non-food products such as soap, shampoo and cleaning
products," said Stirling.

The index, which measures retail sales volumes in shops of all
sizes throughout Indonesia, takes sales volumes in 1997 as 100.

Stirling said that the increase in the index basically
indicated that consumers were buying the same amounts of these
products as they were in 1997.

"This is despite the fact that prices have increased by as
much as 100 percent. As a result, many of our clients are
reporting excellent retail sales," he added.

Advertisers are also showing confidence with increased budgets
for TV commercials and print and radio ads.

Categories showing particularly strong advertising growth
include shampoo, soap, laundry detergent and powered milk.
According to the research firm, other categories which showed an
increase were washing machines and real estate.

"The growth in sales and advertising for consumer durables is
an optimistic sign, as this means people are buying big-ticket
items again," Stirling said. (hen)