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Malls suffer big revenue losses due to recent riots
Shopping malls along Jl
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span>Shopping malls along Jl. MH Thamrin and Jl. Sudirman as well as in Tanah Abang have suffered big revenue losses because of two days of riots in Jakarta, following the announcement of the results of the 2019 presidential election on Tuesday.
Jl. Thamrin looked like a ghost town the day after a big riot on Wednesday. The sidewalks were lined with riot police in black uniforms. The usually bustling business street was so deserted that office workers took selfies in the middle of the road.
Such was the aftermath of a riot in which thousands of protestors, who apparently could not accept that their presidential candidate Prabowo Subianto had lost the April election, flooded the Thamrin-Wahid Hasyim intersection in Central Jakarta.
Near the HI traffic circle, Plaza Indonesia and Grand Indonesia, two of Indonesia’s largest shopping centers, closed in the afternoon on Wednesday. The former closed at 2 p.m. and the latter at 3 p.m. They normally close at 10 p.m.
While Grand Indonesia announced on Twitter the following day that it had resumed normal operations, Plaza Indonesia said it would be closed for another two days, until Saturday.
Plaza Indonesia recorded Rp 676.2 billion (US$46.7 million) in revenue last year according to its annual report. Assuming equal daily revenue, the riot would have cost the mall Rp 1.85 billion in missed daily income. A three-day closure would cost it Rp 5.55 billion.
Grand Indonesia spokeswoman Annisa Hazarini told The Jakarta Post that, “based on observation, [Wednesday] was indeed quieter than usual”. She said the mall usually received 55,000 visitors a day on weekdays. She refused to provide data on estimated losses.
Sarinah Plaza, located 2 kilometers down the road from Plaza Indonesia, reported between Rp 400 million and Rp 500 million in revenue losses due to the riots.
“And that’s just the management’s operational revenue. It doesn’t include the tenants’ individual revenue [losses],” said Sarinah president director Gusti Ngurah Putu Sugiarta Yasa. “[Fortunately], the building is safe. We suffered no [major] damage and may, hopefully, keep it that way.”
Sarinah and its next door shopping center, Djakarta Theatre, faced greater security risks than the malls at the traffic circle. The former two buildings were located right across the very office targeted by the rioters, the Elections Supervisory Commission (Bawaslu).
Rioters started causing commotion in the afternoon on Tuesday, which quickly turned violent after the evening prayers, with rocks being hurled, fireworks fired at police, fires set and cars set ablaze. Observers said it was not dissimilar to the violence that paralyzed the capital in May 1998.
But not all businesses were closed on Wednesday. Indomaret mini markets on Jl. Thamrin served rioters and policemen alike that day. Bread, bottled water, disposable face masks and toothpaste were particularly popular items at a small Indomaret outlet on Jl. Wahid Hasyim. The latter two items are said to help against tear gas.
Meanwhile, retail giant PT Mitra Adiperkasa (MAP) owned many of the affected stores inside Sarinah, Djakarta Theatre, Plaza Indonesia and Grand Indonesia.
MAP spokeswoman Fetty Kwartati said her company was still calculating revenue losses but added that at least some stores in Djakarta Theatre had resumed operations on Thursday.
In Sarinah and Djakarta Theatre, MAP operates a Planet Sports department store and Starbucks cafe, both of which resumed operations the day after the main riots. The May 22 riots would have cost MAP up to Rp 33.2 million in revenue losses there. The losses from the shutdown of Plaza Indonesia and slowed business at Grand Indonesia, where it operates dozens of brand shops, may be much higher.
Two kilometers from Plaza Sarinah is Tanah Abang market, which is the largest textile and garment wholesale center in Southeast Asia owned by Jakarta administration company PD Pasar Jaya.
The operator’s president director, Arief Nasrudin, recently told media that the riot cost around Rp 200 billion in revenue losses daily.
“This morning we checked the area, and there is still a lot of rubble, burned tires and glass shards. Because of that, the vendors have decided to close the market temporarily [until Saturday],” he said.
Thus, Wednesday’s riot cost businesses on Thamrin and at Tanah Abang at least Rp 2.6 billion in missed daily revenue. This is a conservative estimate at best. It does not include losses for retailers outside the area, where safety concerns deterred customers even if stores remained open.
Roy Nicholas Mandey, chairman of the Indonesian Retailers Association (Aprindo), roughly estimated that May 22 unrest cost the city’s major shopping malls Rp 1.5 trillion in total revenue losses.
For all the lost business, Andreas Harsono, a researcher at Human Rights Watch, pointed out that government efforts to control Wednesday’s riots were a silver lining to what was otherwise an event reminiscent of the May 1998 riots.
To secure Jakarta, the National Police had mobilized more than 32,000 personnel over the course of the week. Personnel came from as far west as Riau Islands and as far east as East Nusa Tenggara. As a result, most of the buildings of the affected business, including all those on Jl. Thamrin, were not damaged.
“In 1998, the security forces seemed to be passive in their crowd control. In 2019, we could see the police work very hard to control the crowd,” said Andreas.
