DIGIVESTASI - The Indonesian Retailers and Shopping Center Tenants Association (Hippindo) acknowledges that retail outlets in Indonesia are experiencing a significant trend of closures.

Hippindo Chairman Alphonzus Widjaja revealed that the fashion and lifestyle sectors are the categories most affected by store closures. He attributed this phenomenon to changing shopping trends, particularly in major cities.

“Fashion is closely tied to lifestyle. In big cities, lifestyle trends have a major influence. If a brand cannot adapt to these changes, it will be abandoned,” Alphonzus stated during a press conference in Jakarta on Monday (December 16, 2024).

The decline in consumer purchasing power has further aggravated the situation. Alphonzus explained that weakening purchasing power is one of the reasons behind the closure of hundreds of Alfamart outlets. Of the 400 Alfamart stores that have shut down, most are located in areas experiencing a sharp decline in purchasing power.

“Java is the most affected region because it is home to a large number of workers and employees. While I don’t have precise details on the locations of the closures, most are in areas with weakened purchasing power,” he added.

Alphonzus predicted that the retail sector’s growth this year would remain below 5 percent.

Meanwhile, Hippindo’s Acting Vice Chairwoman, Fetty Kwartati, highlighted another challenge faced by the retail sector: a long and inflexible supply chain. This issue often leads to stock shortages in stores, disrupting sales.

“If store inventory runs out, it leads to broken SKUs, which affects sales. If this situation persists, stores may shut down,” Fetty explained.

According to Kompas.com data, Alfamart has closed around 400 stores, while another retail giant, Matahari, has closed 13 outlets.

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