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Retailers expect challenging third quarter
The Association of Indonesian Retailers (Aprindo) projects annual sales growth between 4.7 and 4.8 percent this quarter, which would be roughly the same as the estimated performance in the last quarter.
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A worker arranges items in a supermarket in Jakarta on Dec. 19, 2023. (Antara/Rivan Awal Lingga)
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ndonesian retailers expect another challenging quarter for sales growth, citing protracted weakness in the rupiah’s exchange rate against the United States dollar, as well as the high interest rate environment, both of which will curb household spending.
The Association of Indonesian Retailers (Aprindo) said on Friday that it saw sales growing between 4.7 and 4.8 percent year-on-year (yoy) in the third quarter, which would be roughly the same as the second-quarter performance and below recent figures for overall economic growth.
“The third quarter will be more challenging, but we’re not saying there will be a decline. As long as there is a mitigation plan and a chance for Bank Indonesia [BI] to cut its [benchmark interest] rate, we hope to still achieve 4.8 percent yoy,” Aprindo chairman Roy Nicholas Mandey said in a press briefing, as quoted from Bisnis.
Read also: Inflation cools more than expected in May
Aprindo has estimated retail sales growth between 4 and 5 percent yoy for the second quarter. That, however, would mark a decline from growth between 5 and 7 percent in the first quarter of this year, according to earlier industry projections.
The association attributed the slowdown to a normalization of consumer demand after Ramadan and the Idul Fitri holiday drove spending in the first quarter.
Preliminary data based on BI’s retail sales index (IPR) projected a 1 percent month-to-month (mtm) decline in retail sales in May.
