Retail index down in January and February

Retail index down in January and February

Moch. N. Kurniawan, The Jakarta Post, Jakarta

The sales volume of grocery goods contracted in January and February, as indicated by a decline in the retail index, according to a bimonthly survey by ACNielsen Indonesia.

The consulting firm said that the January and February retail index fell to 103 percent, from 109 percent in November and December.

"There are two reasons for this decline. Firstly, consumers are adjusting their spending to take account of increases in fuel prices, electricity and other basic commodities.

"Secondly, widespread flooding in January and February seriously disrupted distribution logistics in several areas of Java and reduced the number of shops in some areas," ACNielsen Indonesia managing director Farquhar Stirling told The Jakarta Post on Monday.

However, he said there were some indications the March and April index would rebound as many retailers had reported increased sales for the period.

"The good news is that the January and February index remained higher than the index before the 1997 crisis. It means that consumer buying power has continued at a good level," he said.

The index bottomed out at 84 percent in early 1999, but it then started bouncing back.

The ACNielsen survey was carried out between January and February, covering 5,000 retailers, ranging from supermarkets to small shops in urban and rural areas in various provinces, except Papua and Maluku.

It contained about 60 categories of fast-moving consumer goods, such as noodles, milk, cigarettes, shampoo, detergent and vitamins.

The survey did not include relatively durable goods such as clothes, electronic items, toys, rice, meat and cars.

ACNielsen argued the 60 categories represented the daily products bought by Indonesian people at various income levels.

Company director Teguh Yunanto, who coordinated the survey, said food products had shown good growth in the first two months of this year, but cigarettes were on the down side.

"Food products such as milk, noodles and biscuits did well in the first two months, thanks to Chinese New Year," he said.

"But cigarette sales were poor, as the distribution chain was hit by flooding."

The government has said consumer spending will be the main driver of economic growth this year, with exports and investments expected to slow due to the global economic downturn.

The government has forecast an economic growth of 4 percent this year.

But some economists have said household consumption will remain low this year because many people had lost their job as a result of the economic crisis.