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Indonesian retailers say October’s sales unusually low

The Jakarta Post | November 8, 2018
 The Islamic Chamber of Commerce , Industry and Agriculture (ICCIA)

The Indonesian Retailers Association (Aprindo) has said retail business did not recover in October, and the month was unusually weaker than the previous month's sales, even though it was closer to Christmas and New Year.

Aprindo chairman Tutum Rahanta said low-purchasing power had sparked the weak sales in October.

“The weakening of the rupiah, which affected the prices of goods, combined with stagnant incomes affected people’s affordability to purchase,” Tutum said in Jakarta on Tuesday as reported by kontan.co.id.

Production cost increases in the manufacturing industry caused by the weakening rupiah had forced producers to increase prices, he said, adding that it had erased the people’s purchasing power.

Tutum believed sales would increase in December, but he could not estimate the sales increase figure. “Of course, sales in December will increase. The question is how big the increase will be. If it is not as big as we expect, it [will be a problem],” he added.

Citing the result of a survey, Bank Indonesia estimates that the real sales index (IPR) in October only grew 3.9 percent year-on-year (yoy), lower than the figure in September, which was 4.8 percent yoy.

As a comparison, the IPR grew 2.2 percent in October, 2017, higher than the growth in the previous month, which was 1.8 percent yoy.

The slow sales affected several business groups, including food, beverages and tobacco, transportation fuels and information and communication equipment, the central bank said. (bbn)