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Annual battle of the giant supermarkets begins in Indonesia

Publication Date : 06-08-2012


Two weeks before Islamic Idul Fitri holiday in Indonesia, hypermarkets are gunning for the big kill during the most robust sale time of the year. With giant supermarkets mushrooming in country's major urban centres, including Jakarta, the expected competition will be as fierce during Ramadan, if not even more, than during other normal days.

Rani Martini set her eyes on the stacks of snacks set in front of her. She turned the packages around and read through the price labels and expiry dates. After a few seconds, she put boxes of biscuits in her trolley.

"They are for my neighbours and housekeepers. I'd like to give them Idul Fitri gift baskets, filled with biscuits, cookies and other snacks. It's a family's tradition," the 28-year-old from Matraman, East Jakarta, said.

Martini cited the convenience of hypermarkets and a string of discounts as the main reasons for choosing the Carrefour outlet in Cempaka Putih, Central Jakarta, for her main shopping requirements. She will be making a few more rounds between now and the Idul Fitri celebrations, which begins on the weekend of Aug. 19.

This is time, however, when people are on big spending sprees nationwide, hypermarkets are not sitting on their laurels and waiting for shoppers to come. They have to be creative to make sure that the bulk of the money is spent in their outlets and not on their competitors.

Indonesian Retailers Association deputy head Tutum Rahanta said sales during Ramadan and Idul Fitri usually contribute up to 30 per cent of total annual sales among hypermarket operators.

"They have to really promote their programmes to win this competition," he said.

Some businesses are going as far as providing free transportation to shoppers who plan to spend Idul Fitri holidays in their home villages. Others offer raffle tickets.

PT Hero Supermarket offers door prizes that include a five-day tour of Beijing to observe the life of Muslim Chinese for those who shop at its Giant hypermarkets, Hero Group marketing director Wirry Tjandra said.

"We have been giving free mudik [annual exodus during Idul Fitri holidays] transportation for customers since 2009. This year, we would like to offer something new and more attractive apart from discounts and the usual mudik services," Tjandra said.

Hero will select six winners for the Beijing trip by lottery. To be eligible for the lottery, each customer must spend 100,000 rupiah (US$10.6) at any Giant store.

This year is the first time Hero is providing air transportation for customers to go on mudik. It is offering 1,500 one-way plane tickets and 11,000 one-way bus tickets from Jakarta to several cities in Java, such as Semarang, Surakarta, Surabaya and Yogyakarta.

The transportation minister will witness their departure in Senayan, South Jakarta, on Aug. 16, according to Tjandra. Hero, which operates 130 Hero and Giant supermarkets and 43 Giant hypermarkets across the country, saw net revenue in the first semester of 2012 rise to Rp 4.83 trillion, almost 20 per cent higher from a year earlier.

Other big players in the hypermarket business are already in the act.

PT Carrefour Indonesia is rewarding customers with free mudik transportation, with 1,433 return plane tickets and 5,000 one-way bus tickets from Jakarta to Semarang, Surakarta and Yogyakarta. The Jakarta governor will oversee the departure of Carrefour's customers in Senayan on Aug. 15, a day before Hero's customers are scheduled to depart.

"In addition to offering discounts, we are holding midnight sales this month as well," Carrefour public affairs head Satria Hamid said.

The firm expects a 30 per cent increase in the number of visitors a week before Idul Fitri, Satria said, adding that "at the moment, there are around 5,000 people flocking to our 84 stores during weekdays and 8,000 on the weekends."

"We hope to see a sales jump in the second half of the year as a result of growing demand during Idul Fitri," he added.

This year, Carrefour targets 30 trillion rupiah in sales, up 50 per cent from 2011, as reported by Kontan.

PT Matahari Putra Prima, operator of 71 Hypermarts, relies on discounts and loyalty programmes through membership cards to boost Idul Fitri sales.

It is aiming to boost sales to 5.12 trillion rupiah during Ramadan, representing 40 per cent of total sales in 2012, Matahari public relations manager Fernando Repi said.

"Biscuits, syrups and other packaged goods will dominate sales. We predict a fourfold demand increase in these products," he said.

In the first quarter of this year, Matahari saw net revenue rising 20 per cent to 2.39 trillion rupiah from the same period last year.

Matahari plans to have 84 Hypermart stores by the end of 2012.

PT Lotte Shopping Indonesia, which runs eight Lotte Mart hypermarkets, sees even bigger sales during Ramadan, with commercial leader Donny S Handoko saying that sales in July and August should contribute up to 60 per cent of total sales this year.

"We are giving more emphasis on Idul Fitri-related products, such as Muslim clothing, snacks, syrups, fresh food and gift baskets. We offer discounts of up to 50 per cent and extra points for members of our Lotte Point Card programme," he said.


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