The group, which operates 75 Giant outlets according to its website, saw its revenue drop 34 percent year-on-year (yoy) to Rp 1.7 trillion (US$118 million) in this year’s first quarter as mobility restrictions limit shop operating hours and shifted more consumption online.

“This decision was not easy, but we believe this is the best decision in Hero’s long-term interest and for employees under the company,” said PT Hero Supermarket president director Patrik Lindvall in a statement on Tuesday.

Hero aims to focus on expanding its IKEA furniture retail, Guardian pharmacy and Hero supermarkets outlets. The group plans to open 100 new Guardian pharmacies by 2022 and quadruple its IKEA outlets relative to its 2020 count.

In its statement, the group explained that it planned to convert five of the Giant outlets into IKEA stores and several others into Hero Supermarkets and that it was negotiating transfers of ownership with third parties for other Giant outlets.

Lindvall acknowledged that supermarkets were declining in popularity worldwide, but he also expressed confidence that demand for household appliances, beauty products and daily needs for upper-class Indonesians had strong growth potential.

Hero’s revenue drop was almost matched by a 33.2 percent yoy decline in expenses, such that the company booked a Rp 1.64 billion ($114.470) net loss in the first quarter of 2021, the company’s financial report shows.

Bank Indonesia’s retail sales index dropped below a reading of 200 in April last year when the country began implementing large-scale social restrictions (PSBB) and has remained below that level ever since, settling at 187.9 in March this year.

In a sign of improvement for the industry, retailers surveyed by the central bank said they expected the figure to return to above 200 in April.

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