Spending on consumer products soars: Survey
Spending on consumer products soars: Survey
JAKARTA (JP): Increased spending on consumer products drove up
the domestic retail sales index 8 percent during May and June, a
survey by research company ACNielsen Indonesia found.
ACNielsen's managing director Farquhar Stirling said on
Tuesday the research showed stronger retail sales of food
products than nonfood products during the period.
"The sales volume for packaged food products on the index rose
11 percent in May and June. The index for nonfood products, such
as household cleaning and personal care products, was up only 5
percent during same the period," he told The Jakarta Post.
He noted the increasing trend was absent from the consumer
durable product market during the two months.
Sales of consumer durable products, such as cars and
motorcycles, dropped substantially, he said. Motorcycles sales,
for example, plunged 30 percent.
Stirling stressed the increasing trend in retail sales was not
necessarily caused by an increase in consumer income.
"Consumer income has not significantly changed compared to the
precrisis condition. The thing is that consumers are becoming
wiser in spending their income."
He said people were using money they would otherwise spend on
vehicles, travel and savings to cover the purchase of daily
groceries.
People have started to trim their expenses on tertiary needs
and focus more on the basic needs, said the company's retail
client service director, Teguh Yunanto.
"People are now back to basics. They only buy things that they
need, such as food."
He said the company's research also showed that more consumers
used supermarkets for their daily needs, which led to higher
sales in the modern markets than in traditional ones.
He said ACNielsen conducted regular research on more than
4,600 shops nationwide, ranging from supermarkets to sidewalk
stalls.
"Our retail sales index for supermarkets rose 18 percent in
the first half of this year compared to the second half of
1998... Indonesian consumers definitely appreciate the
convenience and comfort of supermarket shopping."
The survey found the prices of good went up since the crisis
began in the second half of 1997. Compared to the price level at
that time, prices of food and nonfood products increased 149
percent in the first half of 1998, doubled to 205 percent in the
second half of that year, and stood at about 213 percent in the
first half of this year.
However, prices of food and nonfood products in both
supermarkets and traditional shops have remained steady in the
past two months, Teguh added.
He said prices of food products remained relatively stable
despite increased demand, and the price of the nonfood produce
declined slightly by 1 percent.
The recent upward trend in food product retail sales have
boosted manufacturers' confidence in the sales outlook for the
next few months.
ACNielsen's research indicates that a clear sign of recovery
in the country's retail market was observed in the first semester
this year although it was still 20 percent down from volume in
the precrisis period in 1997.
Many companies have started to boost their promotions in line
with the signs of recovery, a tendency reflected in the steady
increase in the value of advertising spending. The value of
advertising spending in the first half of 1999 was 76 percent
higher than the amount spent in the second half of 1997.
The second semester of 1998 was the lowest point for the
retail market, dropping 78 percent from the level recorded in the
second half of 1997.
ACNielsen said the retail market would grow faster if the
country could maintain its political stability and traditional
trade begin its upturn.
Continued stability of the rupiah to the U.S. dollar would
probably ensure only a modest hike in some prices and a possible
decline for some factors.
However, the company warned of an impact on stock levels in
the run-up to the New Year due to fears over the millennium bug,
possibly triggering panic buying. (cst)