Retail industry enjoy $3.5b turnover: Survey

Retail industry enjoy $3.5b turnover: Survey

Tantri Yuliandini, The Jakarta Post, Jakarta

The domestic retail industry is expected to enjoy sales
turnover of approximately Rp 36.7 trillion (about US$3.5 billion)
in 2001, of which 32.3 percent will be generated by hypermarkets
such as Carrefour and Makro, according to a survey conducted by
the Business Intelligence Report (Biro).

Biro said in a statement on Wednesday that over the next four
years turnover would more than double, reaching Rp 87.5 trillion
in 2005.

By that time, hypermarkets will account for 38.5 percent of
the total sales turnover, causing a contraction in other retail
categories such as supermarkets, department stores, mini-markets,
and convenience stores, Biro said.

Hypermarkets are large retail stores with around 7,000 to
15,000 square meters of selling space, offering between 15,000
and 50,000 items including food and general merchandise.

The survey was conducted over a period of three months,
between August and October, among 1,855 outlets owned by 532
companies, which were categorized under supermarkets, department
stores, mini-markets, convenience stores, and hypermarkets.

About 83 percent of the retail outlets are concentrated in
Java while the rest are spread across Indonesia. More than half
of the total are located in the Greater Jakarta area.

Biro said that the growth of the retail business was due to
market expansion, increased buying power, and the higher prices
of goods that are expected in the next four years.

"The retail business is one that experienced the fastest
recovery after the crisis, where a giant retailer can already
achieve net profits after experiencing two years of losses, and
an increased turnover of about 30 percent in 2000," Biro said in
a statement.

To be able to achieve the Rp 87.5 billion in turnover expected
in 2005, some Rp 12.3 trillion in extra investment would be
needed to build 1,900 new outlets.

Foreign retailers, while only holding 8 percent of the total
number of retail outlets in Indonesia, account for more than a
quarter of the total turnover generated by the outlets, Biro
said, adding that foreign retailers usually came in the form of
hypermarkets.

In Asia, Indonesia's retail business is ranked seventh out of
10 Asian countries outside Japan, while India -- despite having
lower income per capita -- is ranked second after China. Biro did
not mention the other seven countries.