Super discount: A Ramayana outlet in Palmerah, Jakarta, offers big discounts on Thursday to attract customers. The retail chain plans to open more outlets to boost sales. JP/R. Berto WedhatamaMid-to-lower segment retailer PT Ramayana Lestari Sentosa (RALS) says it will open 10 new stores in hopes of boosting sales 13.6 percent in 2012 based on rising consumer income.
Ramayana director Setyadi Surya told The Jakarta Post that the company has targeted sales of Rp 7.5 trillion (US$ 832.5 million) this year.
“We plan to open a new store in Cirebon, West Java, in March and one in Lampung province in April.
We will also reopen our store in Kebayoran Lama, Jakarta, that caught fire by May,” he said.
Ramayana, which currently operates 107 stores across the nation, was considering opening additional stores at 10 locations, including those mentioned above and Sorong, West Papua, and Cibadak, West Java, Setyadi said.
The new stores would be funded internally based on last year’s profits, he added.
Ramayana would continue focusing on growth outside Java. Setyadi said. “The performance there has been better.”
“As for contribution to revenue, the Greater Jakarta region contributed 29 percent, while Java Island excluding Greater Jakarta contributed 24 percent. Regions outside Java contributed 46 percent,” he said.
Ramayana missed its Rp 6.8 trillion sales target for 2011 by 3.8 percent, which Setyadi attributed to sluggish fashion retail sales in the first half and unsatisfactory performance of its supermarkets.
“We are trying to expand our supermarket business because the goods sold there make up the daily needs of the lower-middle class segment as well as the upper-middle class segment,” Setyadi said.
In Greater Jakarta, Ramayana was facing competition from minimarkets, whose numbers have risen from 525 in 2006 to 1,868 in 2011 in Jakarta alone, despite a ban on new minimarkets enacted by the local administration.
“Although Ramayana is not in direct competition with [minimarkets], their presence has nonetheless affected our business,” he said.
Meanwhile, Ramayana had been approached by foreign investors to forge partnerships, although none of their discussions had come to fruition, Setyadi said.
“The concepts of those other firms do not match those of Ramayana’s,” he added.
Setyadi said that Ramayana would continue to provide goods at a range of price points to accommodate the upward mobility and rising incomes of their customers.
“For example, for our jeans: We provide those priced at Rp 60,000, Rp 90,000 and Rp 130,000 to accommodate the upward rise in social segments of our customers,” he said.
According to Setyadi, the outlook for the retailers was positive in 2012 as the nation’s economy continued to grow.
Citing promising trends in fashion and consumer goods sales, the Indonesian Retailers Association (Apindo) predicted that retail sales would grow by at least 15 percent this year.
“This is an opportunity for retailers to develop their business quantitatively and qualitatively,” Setyadi said.
He added that the government should reduce the red tape needed to set up new businesses and to opening new stores outside Jakarta.
“It takes one to two years [for businesses] to get hold of licenses.”
