Publicly listed retail giant PT Matahari Putra Prima (MPPA) says that it has not seen any significant change in its performance outlook in the first three months given the country’s cool economic conditions.

Although first quarter financial performance results are not officially available, MPPA director and corporate secretary Danny Kojongian depicted that demand during the period had yet to show positive signs and remained stagnant.

“This, of course, affects our performance,” he said during a press conference in Central Jakarta on Wednesday.

The publicly listed company, which operates supermarket chain Foodmart and apothecary Boston, booked Rp 13.93 trillion (US$1.06 billion) in net sales last year, more than three-quarters of which were contributed by its hypermarket Hypermart.

The revenue was 2.5 percent higher year-on-year (yoy) compared to Rp 13.59 trillion pocketed in 2014. Its costs went up by 2.94 percent yoy to Rp 11.57 trillion while its net profit plunged 66.97 percent to Rp 183 billion.

Danny attributed the plunge to weak demand due to the country’s sluggish economy, which had deteriorated people’s purchasing power.

The firm had taken a measure last year to weather the slow demand that had adversely affected the net profit, he added.

MPPA lowered its stockpile value and purchases to boost goods circulation and increase its stores’ ability to provide fresh and best-selling products. The firm plans to continue carrying out the measures this year.

MPPA’s performance is in line with a recent retail survey by Bank Indonesia (BI) that indicates slower annual retail sales in February compared to the previous month. The real sales index (IPR) grew 9.9 percent yoy in February, lower than 12.9 percent in January. BI predicts the index to slow further to 9.6 percent in March.

The survey also indicates that retail product prices will rise in the next three months on account of Idul Fitri.

“If the producers increase their prices, then we have no choice but to pass the burden onto consumers,” Danny said.

However, he also stated that his firm could negotiate with its big suppliers, such as Unilever and Indofood, to give less-fluctuating prices or to have joint-promotion programs, hoping to slow the increases.

With this year’s economy remaining a challenge, MPPA aims to book single digit revenue growth by year-end, David said, refusing to reveal his firm’s net profit target.

The company will achieve such a target by increasing the number of its stores nationwide, which currently stands at 293 stores with a total area of 734,862 square meters in 29 provinces as of December last year.

MPPA, which also operates wholesaler SmartClub and convenience store FMX, has allocated capital expenditure (capex) amounting to between 4 percent and 5 percent of its revenues for new stores and to renovate its existing ones this year.

The firm plans to open around 45 new stores, 60 percent of which will be located outside Java, subject to changes in economic conditions.

“We are more optimistic about the economic situation in the second semester,” Danny said.

MPPA shares traded on the Indonesia Stock Exchange (IDX) at Rp 1,630 as of Wednesday’s close, a 0.62 percent increase from the previous day. The stock has lost 10.68 percent of its value so far this year, underperforming the benchmark Jakarta Composite Index’s (JCI) 5.66 percent gain.

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