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Carrefour optimistic about Indonesia

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Carrefour Indonesia, the local unit of French giant retailer Carrefour, forecasts further growth in the archipelago’s hypermarket business, supported by strong consumer spending.

The Indonesian unit’s sales in the first quarter climbed 12.7 percent to 267 million euros from 237 million euros ($380 million from $337 million) a year earlier, according to the group’s Web site. In 2010 Carrefour Indonesia’s sales surged 23.5 percent to 1.1 billion euros from 887 million euros the previous year.

From 2009 to 2010, Carrefour opened 16 stores in Indonesia, and it may open additional outlets across the country.

The company is looking to expand, “but we also need to consider aspects such as infrastructure availability, regional economic growth and location,” said Satria Hamid Ahmadi, the unit’s spokesman. “We believe that rising purchasing power will offset the impact from inflation.”

About 95 percent of Carrefour’s products, ranging from groceries such as fresh fruits and vegetables to electronics such as microwave ovens and television sets, originate from Indonesia. The government forecasts the nation’s economic growth accelerating to 6.5 percent this year from 6.1 percent in 2010 on rising consumer demand. Consumer spending accounts for two-thirds of Indonesia’s economy.

Sales in Indonesia’s hypermarket industry are expected to increase by 10 to 13 percent this year, after rising 8 percent, Satria said, without providing additional data.

The local Carrefour unit has a 17 percent share in Indonesia’s “modern” retailing industry, which includes other hypermarket operators such as Giant and South Korea’s Lotte Group.

Yongki Susilo, retailer service director at consumer researcher Nielsen, said that modern retailers’ market share is expected to grow by 1 percent as a result of store expansion. Traditional retailers, which include open-air markets, are expected to account for 60 percent of the country’s total retail sales of Rp 115 trillion ($13.3 billion) this year, with modern retailers making up the rest.

Source : Jakarta Globe

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