Trade Minister Denies Modern Retail Expansion Is Driving Corner Shops Out of Business
Trade Minister Budi Santoso rejected the assertion that the expansion of modern retail is wiping out corner shops. ‘There has actually never been a problem. The partnership pattern works well,’ he said at the Ministry of Trade complex in Jakarta on Thursday, 5 March 2026.
He explained that modern retailers such as Alfamart and Indomaret have indeed formed partnership patterns with corner shops or micro, small and medium enterprises (UMKM) since 2015. One form of the partnership involves supplying goods from corner shops to modern retailers.
For now, Budi said, the role of modern retail is not limited to distributing MSME goods, but also marketing MSME products through partnership schemes.
The statement was in response to the move by the Indonesian Street Vendors Association (APKLI) which reported impacts of modern retail expansion to the Minister of Cooperatives, Ferry Juliantono.
In addition to addressing the impacts, APKLI also submitted input on Presidential Regulation No. 112 of 2007 and the 2015 Economic Policy Package.
APKLI’s General Chairman Ali Mahsun urged that the rules contained in Presidential Regulation 112/2007 must be implemented on the ground. For example, regarding the size of retail buildings: minimarkets under 400 square metres, supermarkets 400–5,000 square metres, and hypermarkets over 5,000 square metres.
Ali also highlighted the clause on partnership status, which requires modern retailers and shopping centres to partner with UMKM in marketing products. He reminded that the 2015 Economic Policy Package which simplified licensing for modern retail must not sacrifice the existence and competitiveness of small enterprises.
According to him, modern retail that has grown rapidly since 2015 has had a negative impact on many warung kelontong, which are becoming fewer in number.
‘We are not at war with modern retail, but we want the people’s economy to turn around, and the sovereignty of the people’s economy to be reclaimed,’ Ali said in a written statement on Thursday, 26 February 2026.
Ali also highlighted the enforcement of Presidential Regulation 112/2007, which has reduced the number of warung kelontong. According to APKLI’s research, there were around 5.1 million warung kelontong up to 2015. That number allegedly shrank by 1 million, from 6.1 million in the original figure. APKLI notes the remaining number is 3.9 million as of 2025.