Small Grocers Close Amid Claims Modern Retail Is To Blame, Trade Minister Responds
Jakarta, CNBC Indonesia – The government has responded to complaints from street traders who claim their turnover at ‘warung kelontong’ has fallen, triggering the closure of several traditional markets due to the expansion of modern retail chains such as Indomaret and Alfamart.
Trade Minister Budi Santoso said the government has long prepared a partnership scheme between modern retailers and micro, small and medium enterprises (MSMEs) to maintain a balance in the retail sector.
According to him, the scheme has been implemented since around 2015 and is intended so that grocery stores can still obtain goods supply and business support from the modern retail network.
“Back then when Alfamart and Indomaret entered around 2015, we created a partnership pattern. The partnership pattern is where the distributor of Alfamart Indomaret supplies the grocers. It has been running since 2015. And the supervision continues,” Budi said during a visit to the Ministry of Trade office in Jakarta, Thursday (5 March 2026).
He explained, the cooperation is not only about distribution. Modern retail also provides mentoring to small business actors across various aspects, including business management and product display in stores.
“Now it’s not just about supplying goods, but even the management and product presentation is constantly assisted by modern retail. So in reality the partnership with MSMEs has been ongoing,” he said.
Budi assessed that the decline in turnover of grocers is not necessarily solely due to the presence of modern retail. He emphasised that the partnership program has been running well.
“I think this is because so far there hasn’t been a problem; it has been running smoothly. The partnership program has been active,” he explained.
However, on the other hand, the Indonesian Street Vendors Association (APKLI) considers the expansion of modern retail has put heavy pressure on the viability of grocers. The minimarket network that continues to expand even to villages is said to impact on turnover declines and even bankruptcy of small businesses.
Ali Mahsun Atmo, the General Chairman of APKLI, said the massive presence of modern retailers has threatened the existence of grocers. If one modern retail outlet grows, it could kill 20 to 50 grocers.
“Modern retailers’ presence makes grocers increasingly shrink, and turnover falls until bankruptcy. One modern retailer can kill 20 to 50 grocers,” Ali Mahsun said when contacted by CNBC Indonesia, Saturday (28 Feb 2026).