Retail Prices to Go Up Next Month Due to Weak Rupiah

Integrating with digital platforms will enable Indonesian brick-and-mortar retailers to better engage with customers, who are increasingly shifting their spending from goods to experiences. (Antara Photo/Yudhi Mahatma)

By : Eva Fitriani | on 10:30 AM September 09, 2015
Category : Business, Corporate News, Featured

Jakarta. Indonesian retailers plan to increase prices for consumers by 6 percent to 7 percent on average next month, as part of their effort to deal with rising costs due to the weakening rupiah.

"Price increases for food and beverage products would be around 5 percent, while electronics would see a hike of between 10 to 12 percent," Roy N. Mandey, chairman of the Indonesia Retailers Association (Aprindo), said on Tuesday.

The rupiah traded at 14,258 against the US dollar on Wednesday morning, having lost 15 percent against the greenback so far this year, as investors bring their capital out of the country amid a weak economic outlook and prospective interest rate increase in the United States.

Roy said he expected retailers to increase price in October, coinciding with efforts to replenish most of their stocks.

Roy expressed the hope that sales could be boost to Rp 175 trillion despite the anticipated price increases if the government would remove some regulatory barriers. The previous sales projection for the year, made in July, stood at Rp 152 trillion. The retail sector's total sales last year amounted to Rp 168 trillion.

Aprindo members, include convenience store chain operators such as Sumber Alfaria Trijaya and hypermarket operators like Matahari Putra Prima, have been grappling with anemic demand due to declines in consumers' purchasing power.

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