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Upbeat retailers sense revived year-end spending
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People shop at a mall in Serang, Banten, on April 9, 2023. (AFP/Dziki Oktomauliyadi)
Days before Christmas, retailers have expressed the hope for solid sales during the year-end festive season.
Budihardjo Iduansjah, chairman of the Indonesia Retail and Tenant Association (Hippindo), told The Jakarta Post on Thursday that, notwithstanding widespread concerns about weaker consumer spending, sales remained stable and were expected to see a strong seasonal bump as the year draws to a close.
“We think that this [weaker spending] will not reduce [sales]. [They] are not rising too much compared with last year, but there is an increase from the previous months,” Budihardjo explained, noting that the Christmas and New Year period tended to drive up sales in December by an average 20 percent.
He added that businesses in the segments of food and beverages (F&B), fashion, salons, theaters and others stood to gain particularly from the year-end effect, driven by bonuses and benefits received by most workers, but this year also by more money circulation after the regional elections that were held in November.
He went on to say that this had improved people’s spending power, helping businesses to bounce back from months of sluggish performance.
The country has grappled this year with what some economists and business associations have pointed to as signs of weakening consumer spending power, such as a shrinking middle class, a rising share of expenditure going to groceries and a sharp drop in automotive sales.
However, approaching the year-end, the consumer confidence index rose to 125.9 points in November from 121.1 in the previous month, according to Bank Indonesia’s (BI) latest monthly survey, published on Dec. 10.
