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Retail sales recovery lags despite eased curbs
The slow pick up in retail sales spells bad news for consumption, which is a key contributor to economic recovery.
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Limited capacity: A shopping mall in Bogor, West Java, prepares to welcome back visitors following the easing of public activity restrictions (PPKM) from level 4 to level 3 on Saturday. Only vaccinated visitors are allowed to enter malls, which can operate at a limited capacity. (Antara/Arif Firmansyah)
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etail sales did not return to prepandemic levels in November, even though consumer confidence and visits to retail and recreation places had recovered by that month, spelling bad news for Indonesia's consumption levels, which are a key contributor to economic recovery.
The retail sales index (RSI), based on a survey of 700 retailers in 10 cities, is estimated to have stood in November at 199.7, lower by 7.79 percent than in the same period in 2019, Bank Indonesia (BI) data show.
Of the eight RSI categories, only food, beverage and tobacco and vehicle fuel were estimated to have grown positively by 17.5 and 34.9 percent from a year earlier, respectively.
“Some people have not recovered their purchasing power completely,” said Mohammad Faisal, the executive director of the Center for Reform on Economics (CORE) Indonesia, on Tuesday. “Usually, the middle class is the biggest contributor to retail [sales].”
The index also suggests that retailers, such as supermarkets and hypermarkets, have not recovered their losses nearly two years into the pandemic.
In contrast to the RSI, the number of visitors to retail and recreation places has been higher than the normal level seen between January and February 2020 since at least late September, Google data show, as the government continued to ease mobility curbs.
On Dec. 6, for example, the number of visitors to retail and recreation places was 8.14 percent higher than the normal level on a seven-day moving average basis.
