Modern markets no threat: Survey

Ika Krismantari, The Jakarta Post, Jakarta

Modern retail outlets in the country such as hypermarkets and minimarkets do not pose any threat to wet markets and traditional grocery stores despite their massive expansion during the past two years, a survey shows.

The latest survey by Nielsen shows a "strong indication" that the presence of hypermarkets or other modern groceries did not affect the existence of wet markets and traditional grocery stores.

Nielsen director for retailer services Yongky Surya Susilo said during the presentation of the survey last week the competition between hypermarkets and traditional markets was nothing to worry about as the two retailing channels served different market segments.

"The surviving wet market traders prefer to cater to food sellers or small restaurants, which buy the goods on a daily and massive bulk basis. They are also focusing on medium-income house wives, while hypermarkets are focused on high-income and young and practical or image-seeker moms," he said.

He rebuffed the general assumption that hypermarkets were growing rapidly in the country at the expense of traditional markets, saying that existing traditional grocery stores were still dominant and growing, reaching almost 1.7 million in 2005 as compared to modern retail stores, which had only reached about 8,000 stores in the same period.

"Even in Jakarta, the number of the outlets of supermarkets or hypermarkets decreased to 196 stores in 2006, as compared to 233 in the previous year, while the traditional stores increased to 91,221 stores from 88,974 during the same period," Yongky said.

He also cited another survey that gave surprising results, indicating that the majority of urban Indonesians did their in traditional outlets even though the data did not include how much money was spent in each type of outlet.

The 2006 survey, which covered a sample of 1,385 respondents in four major cities -- Jakarta, Surabaya, Bandung and Makassar --, revealed that people visited traditional outlets 25 times on average per month, while they only visited modern outlets two times per month.

The respondents also said that they tended to visit wet markets on average 12 times per month, while the frequency of visits to supermarkets and minimarkets only averaged three times and five times per month.

The survey comes amid growing criticism of the rise of modern retail outlets, particularly hypermarkets and minimarkets.

The government is expected to issue a new retail regulation in the middle of this year to curb the rapid spread of modern retailers in the country by imposing a zoning system.

Earlier in March, the Alliance of Traders Associations, representing traditional retailers, urged the Jakarta administration to issue a gubernatorial decree on market regulations, saying the existing 2002 city ordinance on modern retail restrictions was not effective.

The alliance claimed that traditional markets throughout the city had suffered financial losses of up to 75 percent, and some of the traders made less than Rp 50,000 daily last year.

In response to this, Yongky said that some efforts could be made to empower the wet markets in order to go head-to-head with modern retailers, including revitalizing markets in line with the changes in the geographical surroundings and focusing on business generators.