The sluggish retail market in the first quarter of this year did not make retailers tired to expand its expansion wings. This is evident from the opening target of new outlets launched by the three Retail players Land, Alfamart, Indomaret, and Seven Eleven.
Alfamart Minimarket managed by PT Sumber Alfaria Trijaya Tbk plans to open 1,200 outlets throughout 2015. Of that number, 50% will be outside Java Island. The reason, Alfaria already has several distribution channels, among others in Pontianak, Banjarmasin, Manado, and Batam. By having 10,086 stores last year, the number of retailers Alfamart will have through the expansion reached 11,286 outlets.
Until the first quarter of this year, Alfamart has realized 17% opening new outlets or equivalent to 200 outlets. Through Alfamart Retail Asia Ltd, a joint venture between Alfaria and Singapore-based SM Retail Supermarket, it also plans to open 100-120 stores in the Philippines this year. The company also intends to play in retail pharmacies as part of business diversification in order to boost business growth this year. For that matter, Alfaria will develop a pharmacy business through its subsidiary PT Sumber Indah Lestari who manages retail Dan Dan Dan. Currently, the retail already has 58 outlets in Indonesia.
On the other hand, PT Indoritel Makmur Indonesia Tbk through its subsidiary PT Indomarco Prismatama is quite optimistic to be able to achieve 20-25% outlet growth. With 10,816 outlets throughout 2014, Indomaret will operate around 12,979 to 13,520 stores this year. Indomaret said it will focus on developing its retail network in Java Island by investing approximately Rp 450-500 billion.
Although not as big as two giant minimarket above, but the existence of Seven Eleven (Sevel) can be a dark horse in the retail industry. The reason, retail managed by PT Modern Putra Indonesia (subsidiary of PT Modern International Tbk), plans to build 50 new outlets throughout 2015 from 190 existing outlets. Prepared investments reached Rp 2-3 billion per outlet.
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HERO, Subtract Some Starmart and Guardian Stores, But Add in IKEA
HERO, one of the pioneers of the retail industry in Indonesia, today announced the closing of 74 Starmart and Guardian outlets in various cities, as conditions are no longer possible.
During the first half of 2015, HERO suffered a loss of 34 billion rupiah, down considerably compared to the same period last year which posted a profit of 95 billion.
HERO currently holds several brands such as HERO, GIANT, STARMART, GUARDIAN, and the latest one is IKEA.
However, following the success of IKEA’s first outlet in Alam Sutera that attracted 4000-5000 visitors in the weekend, IKEA will soon open its second outlet in Sentul, with an area of approximately equal to the outlets in Alam Sutera.
In today’s difficult conditions because of the high dollar exchange rate against the rupiah, it is certainly a challenge for IKEA to book sales and profits with its imports that meet most of its stores.