This Is The Cause Of Large Retails That Many Close According To The Ministry Of Trade

Illustration. (Photo: Doc. Antara)

JAKARTA - The phenomenon of closing several modern retail outlets of large size may be caused by changes in people's consumption patterns so that outlets continue to suffer losses.

In addition, the location of outlets that have begun to be abandoned by consumers and the increasingly tight competition in the food retail business is also likely to close many large modern retail outlets.

This was disclosed by the Acting Director General of Domestic Trade of the Ministry of Trade, Kasan Muhri, Saturday, February 11.

According to Kasan, there has been a shift in consumption patterns from offline to online which was accelerated during the pandemic. People can easily compare the prices of goods in offline and online retail via their devices.

"Usually lokapasar offers cheaper goods than retail offline," he explained, quoted from Antara.

In addition, currently, people's consumption patterns tend to prefer shopping for daily necessities in small-formate shops such as supermarkets or minimarkets close to settlements.

"It is more practical to look for goods without having to surround a large shopping area," he said.

Kasan added, based on Nielsen data, the growth in Fast Moving Consumer Goods (FMCG) consumption in large outlets has shown a minus movement since before the pandemic.

In contrast, the consumption of FCMG in small outlets always shows quite high growth.

On the other hand, the outlets that are closed are outlets that continue to suffer losses so that efficiency must be done. One form is by reducing operating expenses.

"The location of the closed outlets began to be abandoned by consumers because there may be a company strategy to move outlets to more profitable locations," he continued.

In this regard, the government is optimistic that modern retail performance still has the opportunity to continue to grow in 2023. This is influenced by the sentiment of ending the pandemic, the stability of the national economy and the start of the political year which is believed to increase product spending in retail.

"However, business actors are expected to continue to adapt to the pattern of public consumption, for example moving outlets to more profitable locations and also providing marketplace services," Kasan concluded his explanation.