Retail sales estimated to increase by 20%

Retail sales estimated to increase by 20%

JAKARTA (JP): The Indonesian Retail Merchants Association (Aprindo) is upbeat sales will increase by 20 percent to Rp 33 trillion (about US$3 billion) this year from Rp 28 trillion last year.

The association's executive director Kustarjono Prodjolalito said although uncertainty still clouded the economy the rise was still possible due to expansion of major retail operators.

He also attributed the projected increase in sales to an average 30 percent increase in salaries in private companies early this year.

"The growth of sales in the first quarter showed a promising trend. It was a good start for the retailers," he said in a media briefing.

Aprindo, which groups 285 modern retail operators, controls about 2,000 outlets in the country.

Kustarjono said the relatively low interest rates had also contributed to an increase in consumer spending. "We believe sales will increase even more in the coming months," he said.

He said that the 10 percent increase in prices in April would not really affect the overall sales because most of the customers of the association's members came from the middle and high-income groups.

"Of course it will affect the sales volume, but the impact is minimal," he said.

Kustarjono said many of the association's members planned to reopen their outlets damaged during the May 1998 riots.

Some other members are building new outlets in anticipation of better economic conditions in the coming years, he said.

"We estimate retailer expansion in opening new outlets this year to grow by 7 percent."

The estimated growth in expansion this year is similar to the 8 percent expansion growth prior to the economic crisis in 1997.

Expansion declined to less than 1 percent between 1998 and 1999 as retailers halted their expansion programs to cope with the impact of the country's worst ever economic crisis which peaked in 1998.

Last year expansion rebounded to 4 percent due to the improvement in the economy.

According to Kustarjono, both large and small companies had expanded aggressively.

Sogo will open an outlet in Surabaya, and Matahari will also open new outlets in several cities this year, he added. "Thousands of mini supermarkets will also open this year," he added.(05)