RI retail spending 2nd highest in Asia Pacific

The Jakarta Post, Jakarta | Fri, 03/20/2009 1:10 PM

The declining consumer confidence index, coupled with rising prices for fuel and food commodities, have failed to topple Indonesia as the second highest retail spender - after China - in the Asia-Pacific region, a survey shows.

"When the whole world was tightening its belt during the global crisis, our country recorded an increase of around 21 percent, to Rp 93.5 trillion *US$8 billion* in retail spending last year," Yongky Surya Susilo, retail service director at marketing information firm Nielsen, said Thursday.

"And it gets more odd because the increase in retail spending took place at a time when the consumer confidence index was plunging."

The shopping spree trend will continue in 2009, estimated to increase by 15 percent, he added.

"The general elections are a major factor for our estimation, because previous surveys show the consumer confidence index tends to increase during election years, which will raise retail spending in the end," Yongky said.

Nielsen's data shows consumers tended to shift their retail spending to traditional stores rather than "modern" ones.

"This is a continuation from last year's trend, in which we recorded a 19.6 percent increase in sales by traditional stores, which usually record an increase of only around 9 to 12 percent," Yongky said.

The survey also shows consumers spent more on basic goods last year.

Nielsen surveyed around 2,000 people in five major cities - Jakarta, Bandung, Surabaya, Semarang and Medan - in early January, with 77 percent of respondents saying they would prioritize buying food commodities in 2009.

Nielsen survey also showed around 25 percent of retail consumers preferred to shop for food commodities, while 60 percent preferred to buy fresh meat and fish at traditional markets.

"However, modern markets still have room to grow. Traditional markets consist of around 80 percent of the retail trade channel now," Yongky said.