Retail sales to suffer short slump

Retail sales to suffer short slump

Evi Mariani, The Jakarta Post, Jakarta

Already weak retail sales are expected to experience a short-term
slump following the Marriott bombing, as people stay away from
shopping malls and department stores because of security
concerns.

"Retail sales for this year were already experiencing limited
growth (from last year). This latest incident (the bombing) adds
security concerns and will further depress sales for maybe two or
three months," Rudy J. Sumampouw of the Association of Indonesian
Retailers (Aprindo) told The Jakarta Post on Monday.

He said the association had yet to calculate estimated losses
from the bombing.

An analyst at PT Trimegah Securities painted a similar picture
of the retail sector, saying sales would slump for perhaps a
month before beginning to return to prebombing conditions.

"I do not think the bombing will affect overall retail sales
for a long period," said Arya Satyagraha, a retail sector analyst
at the securities firm.

He said sales of primary goods would not change, because
despite security concerns people still had to purchase their
daily needs.

"Apparel sales will be more severely hit than primary goods
because people, in other words potential buyers, will tend to
avoid shopping centers temporarily," he said.

Since the bombing, messages have been passed from mobile phone
to mobile phone, warning people to avoid particular shopping
malls in the city.

The commercial director for food products at Makro hypermarket
said Makro was not revising its sales target for the year.

"Our customers are mostly resellers, service providers and
institutional buyers who have to buy their primary needs no
matter what the situation," Kuswanto Gunadi told the Post.

However, he did acknowledge that Makro sold to hotels directly
affected by the bombing.

"But sales to hotels, restaurants and catering services only
account for 10 percent of our total sales, so it will not affect
our overall sales," he said.

Most retailers had already set conservative sales targets for
the year, with the purchasing power of consumers weakening due to
the lingering global economic recession, the recent outbreak of
Severe Acute Respiratory Syndrome in Asia and rising unemployment
at home.

Sumampouw said Aprindo had set this year's sales growth target
at below 20 percent, while in "normal" circumstances growth
usually reached above 20 percent.

Arya said that since last year retail sales had experienced
only one-digit growth, from two-digit growth in 2000 and 2001.