[Updated at 12:15 a.m. on Friday, May 19, 2017]
Jakarta. Supra Boga Lestari, a listed upmarket groceries retailer behind Ranch Market and Farmers Market brands, braces for a slower net sales growth and lower profit this year amid fierce competition and uncertainty in domestic demand.
Supra Boga net revenue will grow 3.7 percent this year to Rp 2.14 trillion ($159.73 million), the company's president director Meshvara Kanjaya said on Thursday (18/05). The company posted a 7.7 growth in net revenue last year to Rp 2.07 trillion.
"The increase in net sales will come from the additional four new stores we open," Meshvara said.
The company plans to open two Farmers Market stores in Jakarta and one in Samarinda, East Kalimantan, as well as one Ranch Market store in Malang, East Java. The company sets aside Rp 40 billion to support the expansion.
Supra Boga today operates 13 Ranch Market and 17 Farmers Market stores across the country.
The Central Statistics Agency reported earlier this month that household spending grew at 4.93 percent, lower than its usual above 5 percent, pace, reflecting frail consumer spending power.
Supra Boga also expects its profit to fall to Rp 28 billion, or 30 percent less than last year, Meshvara said, adding that the company is facing fierce competition from its rivals and online retailers.
The company introduced digital store KeSupermarket.com last year, allowing customers within a five-kilometer radius from its 15 stores in Jakarta and Tangerang to shop online and have groceries delivered to their homes. It has also signed a cooperation agreement with Asian online groceries delivery company HappyFresh.
Correction: The previous version of this article said Supra Boga net sales will grow 3.7 percent this year. The Jakarta Globe apologizes for this error.