2021 Has Just Started, But It Already Makes Matahari And Hero Supermarkets Rack Their Brains

JAKARTA - The retail industry in the country is still fighting to survive the pressure of the COVID-19 pandemic. At the beginning of 2021, PT Matahari Department Store Tbk (LPPF) and PT Hero Supermarket Tbk (HERO) experienced bad conditions. Both have to rack their brains to keep the business running, even though they have to close some stores.

Not only because of the pandemic, but the government-issued restrictions on the operating hours of shopping centers in Java and Bali earlier this year also made the retail sector in the fashion sector battered. The most affected retailers are department stores. Because after all, the decision to open retail depends on the policy of the shopping center owner.

In the midst of the chaos in the retail business due to the COVID-19 pandemic, Lippo Group's retailer PT Matahari Department Store Tbk reported their performance in 2020. Matahari department store posted a decline in performance in 2020.

Quoting from the information disclosure page of the Indonesia Stock Exchange (IDX), Tuesday, February 2, the management of the LPPF-coded issuer explained that the company's gross sales in 2020 reached IDR 8.6 trillion. This value decreased 52.3 percent year on year (yoy) from IDR 18.03 trillion in 2019.

Gross profit also decreased 54 percent to IDR 2.82 trillion from IDR 6.12 trillion previously. The EBITDA or profit before tax for this Matahari outlet manager is minus IDR 22 billion compared to IDR 2.21 trillion in 2019.

As a result, Matahari recorded a net loss of IDR 823 billion in 2020. This value is far inversely proportional to the profit of IDR 1.37 trillion in 2019.

Furthermore, Matahari Dept Store operates 147 stores in 2020. However, in the fourth quarter of 2020, they closed 4 unprofitable outlets, so that in 2020 the company closed 25 stores.

Meanwhile, 23 stores out of 147 are on the monitoring list. In fact, reportedly, the management will close 6 outlets of the 23 stores on the list by 2021.

Not only fashion retail, but the food retail industry in Indonesia lately is also heavily influenced by market conditions. The never-ending pandemic has also contributed to a change in the shopping behavior of customers in retail stores. Moreover, the retail sector is an industry that directly faces the community.

Giant Supermarket Margo City Closed

Giant supermarket outlets in Margo City shopping center, Depok, West Java, are no longer able to withstand the pressure of the COVID-19 pandemic. The retail business owned by PT Hero Supermarket Tbk is rumored to be permanently closed as of March 2021.

Head of Corporate and Consumer Affairs of PT Hero Supermarket Tbk, Dicky Risbianto, said that the closure of the Giant supermarket in Margo City was because buyers were quiet, due to the COVID-19 pandemic. Especially since the strict restrictions were re-imposed in early 2021.

"Currently, we have decided to close shop in a hypermarket format in the mall, in this case, Giant Margo City", he said, when confirmed, Tuesday, February 2.

When he was asked about the total Giant outlets that had been closed during the COVID-19 pandemic, Dicky was reluctant to reveal it. However, he stressed that his party was carrying out a business transformation.

"As announced, we are carrying out a business transformation. This means there is shop closure. But it also means that other stores are being redesigned and renovated, all of which will lead to more sustainable and stronger businesses in the future", he explained.

Regarding employees who will be dismissed, Dicky ensures that they receive their rights in accordance with Law Number 13 of 2003 concerning Manpower, which acts according to applicable laws and regulations.

"We have communicated clearly with all employees and so far we have worked hard to smooth the transition as best as possible and treat all fairly and respectfully", he said.

As an illustration, this is not the first time Hero has decided to close its business line. In fact, the closure had happened long before the COVID-19 pandemic arrived in the country.

In July 2019, Hero was found to have closed 6 of their Giant outlets. The low purchasing power of the people at that time was the reason these outlets had to go out of business.