Fri, 29 Sep 2000

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)