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JAKARTA - The Indonesian Retail Entrepreneurs Association (Aprindo) said modern retail performance was still sluggish amid Indonesia's improving economic growth.

It is known, economic growth reached 5.17 percent year on year (yoy) in the second quarter of 2023.

Aprindo Chairman Roy Nicholas Mandey said growth tends to be better at traditional retail than modern retailers.

Roy said modern retail was only able to grow 1.2 percent (yoy) in the second quarter of 2023. In fact, in the first quarter of 2023 it reached 2.6 percent growth.

Meanwhile, traditional retail in the first semester of 2023 grew to 4.5 percent year to date (ytd).

"This is what I say is contradictory, because inflation is humble, economic growth is increasing, but in the modern retail sector it is actually low. Now, this is our concern. Aprindo as an Indonesian retail entrepreneur's association sees this figure, this is our concern," Roy told reporters in Jakarta, Friday, August 18.

Cumulatively, Aprindo said the national average retail growth in the first semester of 2023 reached 3.2 percent.

According to Roy, there are several regions that experienced retail growth above the national average, such as in Jakarta 7.8 percent, Bali and Nusa Tenggara 15 percent, Sulawesi 7.5 percent, and Central Java 4.8 percent.

Meanwhile, in some areas, retail growth is still below the national average, for example Kalimantan grew 2.4 percent, West Java grew 0.9 percent, North Sumatra and Aceh 0.8 percent. In fact, in East Java retail growth was minus 3.9 percent.

Roy said that monthly inflation is also considered to tend to improve. In July 2023, inflation was recorded at 3.08 percent (yoy).

However, he said, the improving inflation was not followed by modern retail sales volume, although in terms of sales value tended to increase.

He assessed that there has been a shift in consumer behavior at this time, where people prefer Oilita products in traditional retail, instead of premium packaged cooking oil in modern retailers.

"So, there are (communities) who hold back spending because in order to be safe (safe), some hold back shopping or reduce spending because there are expenditures that must be issued, but there are also those who are switching or changing behavior," he said.


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