Retailers face unpredictable future

Retailers face unpredictable future

JAKARTA (JP): The Association of Indonesian Retailers
(Aprindo) said yesterday the country's retailers could record
high sales this year despite the economic turmoil, but the
association still anticipated an unpredictable outlook next year.

Aprindo executive director Kustarjono Prodjolalito said retail
sales had risen in the last quarter of this year, exceeding sales
in the same period last year.

The high sales, mainly booked by Jakarta retailers, were
generated by large purchases made by laid-off workers who wanted
to return to their home villages.

"Hundreds of thousands of workers have lost and will lose
their jobs due to the current economic crisis. These people have
been spending their severance pay to buy mementos before they
return to their home villages," Kustarjono said.

He said the laid-off workers would continue their buying spree
until next month, but sales prospects would be unpredictable in
the following months after they all returned home.

He said there were also some reports saying people from
neighboring countries like Singapore and Malaysia were coming to
Jakarta to shop to benefit from the rupiah's sharp depreciation
against the dollar.

"But we have no accurate data to confirm the reports," he
said.

Kustarjono said despite high sales, retailers' revenue was
projected to decline this year because they had to pay rent in
dollars, which had appreciated by more than 50 percent against
the rupiah.

He said retail business growth was projected to decrease to 15
percent this year, against an average 25 percent growth over the
past five years.

He said the retailers' association could not forecast sales
and growth for next year due to the monetary fluctuation.

"The retail business looks like a man walking in the dark of
night. It can fall into a hole at any given time," Kustarjono
said.

Association chairman Steve Sondakh said the rent quoted in
dollars by property owners was very burdensome to retailers and
could force some out of business.

The association strongly opposed such practices and had called
on the government to rule that retail space rental should be
quoted in rupiah.

"Long before the monetary crisis took place, we asked that
rental be quoted in rupiah. We urged such a measure again after
the crisis occurred," Steve said.

Steve said the association's members had promised not to lay
off workers during the monetary crisis.

"Laying off workers is the last option. What we are going to
do is to increase the productivity of existing employees," said
Steve, who is also president of the Hero supermarket chain.

He said the brunt of the monetary crisis was experienced by
retailers who mostly sold imported goods.

The rupiah's depreciation made imported goods less competitive
than local goods.

Fortunately, Steve said, imported goods accounted for only
about 10 percent of total merchandise sold at local retailers.

"The current situation is a good opportunity for suppliers of
locally produced goods to increase sales, but they need to
improve the quality of their goods," Steve said. (jsk)