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100,000 retail workers on brink of furlough as consumption free-falls
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Shop attendants wearing face shields wait for customers at a mall in Serpong in Tangerang, Banten, in this undated photo. (JP/R. Berto Wedhatama)
M
ore than 100,000 workers in the retail industry face the risk of being furloughed as customers have been visiting rarely and spending little during the COVID-19 pandemic, associations have said.
An internal survey by the Indonesian Shopping Center Tenants Association (Hippindo) revealed that retail sales from May to July were down about 80 percent from the pre-pandemic level. The association projected that lifestyle retailers would also post a 60 percent year-on-year (yoy) contraction in the third quarter.
“Our current data [from 90 companies] show that around 100,000 employees may be furloughed,” Hippindo chairman Budihardjo Iduansjah told reporters during an online press conference on Monday.
In addition to the furloughed employees, around 1.5 million workers could face other financial perils, such as pay cuts and shift reduction if the pandemic continues to suppress shopping center visits and revenue, it said.
The pandemic has brought the retail sector to its knees amid movement restrictions, weakening purchasing power and customers’ preference to stay at home to avoid catching the coronavirus.
Household spending, which accounts for more than half of Indonesia’s gross domestic product (GDP), fell 5.51 percent yoy in the second quarter, which compares to annual growth of 5.18 percent in the same period last year, according to Statistics Indonesia (BPS).
A recent Bank Indonesia (BI) survey showed that retail sales fell 12.3 percent yoy in July, a smaller drop than the 17.1 percent contraction in June. The central bank’s survey projected retail sales in August to be down 10.1 percent from the same month last year.
