Two Business Leaders Speak Out on War's Impact, Revealing Shocking Facts
Jakarta, CNBC Indonesia - The domestic retail industry is currently facing a heavy dilemma amid continuously rising cost pressures. On one hand, price increases for goods are unavoidable due to upstream pressures from expensive raw materials, a consequence of the war in the Middle East. On the other hand, businesses must restrain these increases to avoid further squeezing public purchasing power, especially as they enter a long low season period.
General Chairman of the Indonesia Shopping Centre Managers Association (APPBI) Alphonzus Widjaja stated that the current situation is not only experienced by Indonesia but also by many other countries due to the impact of the conflict in the Middle East. However, the pressure domestically could be greater as it coincides with a sluggish sales period.
“The current difficult conditions due to the impact of the war in the Middle East are not only experienced by Indonesia alone, but of course also by many other countries. The impact experienced by our country also has the potential for greater pressure because the timing coincides with the start of the ‘low season’ period as usual in Indonesia, which is after Ramadan and Eid al-Fitr, which is the peak season for retail sales,” Alphonzus told CNBC Indonesia on Wednesday (15/4/2026).
He explained that this year’s low season is even expected to last longer than usual because Ramadan and Eid al-Fitr fell earlier, in the first quarter. This means businesses must face a weak sales period throughout the second and third quarters.
Amid these conditions, price increases become an unavoidable issue. However, Alphonzus stressed that retail industry players and shopping centres must keep the increases as minimal as possible so that the market situation does not worsen.
“Price increases cannot be avoided but must be minimised as much as possible, so that this long low season does not become a long and deep low season,” he emphasised.
Similar pressures are also felt by retail players. General Chairman of the Indonesian Retailers and Shopping Centre Tenants Association (Hippindo) Budihardjo Iduansjah revealed that price increases have already occurred at the factory and raw material levels, even extending to various types of products.
“Yes, raw materials have already (increased), factories have already imposed price hikes. Not just from textile raw materials, but we in retail are receiving price increases from electronics, plastic products, household items, to electrical appliances. Everything has increased, because everything requires plastic,” said Budihardjo when contacted separately.
According to him, the retail position is currently more downstream, so there is limited room to hold prices. Nevertheless, businesses are still trying to negotiate with producers so that the increases are not immediately passed on to consumers.
“Well, this cannot be avoided. In this case, Hippindo applies, we appreciate if there are factories that can provide special prices first to consumers. So we still have time to adjust price increases gradually,” he said.
He stated that the strategy of gradual price adjustments is one way to ensure consumers are not shocked amid purchasing power that has not fully recovered.
“That’s the position of the retailers, our buyers. We are negotiating, but we understand that these raw materials will raise the price of goods, and we provide opportunities like special prices for the first orders so consumers are not shocked. That’s what we’re negotiating,” explained Budihardjo.
Previously, General Chairman of the Indonesian Filament Yarn and Fibre Producers Association (APSyFI) Redma Gita Wirawasta said that the textile and textile products (TPT) industry is increasingly pressured by raw material prices due to the Middle East conflict that has pushed global oil prices to around US$110 per barrel.
“The price of paraxylene, the main raw material for polyester, is currently at US$1,300 per tonne, up around 40% from two weeks ago. This price increase has not yet fully reached the downstream industry,” she said on Tuesday (7/4/2026).
“The domino effect caused by the rise in textile raw material prices will impact gradually over the next three weeks. In the next one week, this price increase will be distributed to fabric producers, and in the following two weeks, it will be distributed to the ready-made clothing sector,” Redma continued.
It does not stop there, she added; price adjustments will continue to the retail sector. Inevitably, there will be price increases for finished goods in retail.
“It is estimated that the increase in the retail sector will be around 10%,” she said.