High Electricity Tariff Is One Cause Many Retail Industries Go Bankrupt

By : Herry Barus And Aldi Firhand. A | Thursday, November 02 2017 - 19:11 IWST

Roy Mende Chairman Aprindo (Photo Ist)
Roy Mende Chairman Aprindo (Photo Ist)

INDUSTRY.co.id - Jakarta- The Indonesian Retail Entrepreneurs Association (Aprindo) considers that the government needs to provide incentives for electricity costs that can reduce the burden of retail spending and prevent more retail stores from shutting down in the "online" shopping competition.

Aprindo Chairman Roy Mandey explained that electricity usage accounts for 35 to 40 percent of retail expenditures, so that the incentives for electricity costs will provide relief to retailers.

"It is helpful because these incentives provide relief on the payment obligations that are currently not in line with the cost of income," said Roy after attending the handover of capital assistance in Indogrosir, Bekasi, Wednesday (1/11/2017)

He explained that the cost of electricity will certainly be charged to commercial costs resulting in the sale price of goods in physical stores more expensive than online channels.

According to him, the government could refer to the manufacturing industry that gets 30 percent electricity subsidy if the goods production process is done at 00.00-06.00 WIB.

Retailers who are currently still growing after the economic slowdown need to be given incentives for electricity costs, especially at peak hours. Electricity rates at peak hours are considered too expensive, especially if the retail store is located in a mall or shopping center.

"If the retail is in the mall, there is a management fee which certainly becomes additional, which is what we expect the role of the government towards the sustainability of modern retail," he said as quoted by Antara.

He added that the government needs to issue new regulations in favor of modern retailers, such as the revision of Presidential Regulation (Perpres) No. 112 on Structuring and Fostering of Traditional Markets, Shopping Centers and Modern Stores, which modern retailers are waiting for.

A number of retail stores such as 7-Eleven, Matahari in Pasaraya Manggarai and Blok M, and Lotus closed their retail outlets. Then at the end of the year, it is Debenhams' turn at Senayan City that will close outlets.

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