Kaleidoscope 2017: The Collapse of Modern Retail Stores in Indonesia

INDUSTRY.co.id - Jakarta - The year 2017 does not seem to belong to conventional or more familiar retail stores called offline stores. Why in this year there are five modern retail stores should be out of business. The reasons vary from production costs that do not match the margin, locations that are no longer strategic to want to open a new business.

In fact, some of them assess the business was destroyed because slowly consumers began to switch to online shopping. The sluggishness of the modern retail business is surprising. Because at the same time the government claims there is nothing wrong with economic policy, but in fact modern retail stores are sluggish to close outlets.

Just to remind you, here are five modern retail brands that close throughout the year 2017:

Lotus

Lotus Department Store closed three outlets in Thamrin, Cibubur and Bekasi at the end of October 2017. The closing of Lotus outlets is done to polish the financial performance of department department division of PT Mitra Adi Perkasa (MAP) Tbk, the parent company of Lotus. In this year, Lotus suffered continuous losses so MAP decided to close it.

7-Eleven

PT Modern Internasional Tbk (MDRN) closed all 7-Eleven outlets starting June 30, 2017. The reason for this was that the operational costs were higher than their income so 7-Eleven suffered heavy losses.

Recorded until March 2017, 7-Eleven recorded a loss of Rp 447.93 billion. Whereas the same period the previous year profit of Rp 21.31 billion. That's five modern retailers closed during 2017.

Closing this outlet into a lesson for you who have a business to always be creative and innovative to develop business so it continues to be profitable.

Matahari

PT Matahari Department Store Tbk (LPPF) closed Matahari Department Store outlets in Pasaraya Manggarai and Pasaraya Blok M in September 2017. In mid November 2017, Matahari closed stores in Taman Anggrek and Lombok City Center.

This closure is largely due to poor performance of the company. Even so, the management of Matahari said it will still expand the opening of new outlets in the next year.

Debenhams

This closing modern retail outlet also belongs to PT Mitra Adi Perkasa Tbk. PT Mitra Adiperkasa Tbk Debenhams outlets in Senayan City at the end of 2017. In Senayan City, Debenhams opens outlets on three floors at once.

Previously this company has closed outlets Debenhams in Kemang Village and Supermall Karawaci. This closure is believed to be due to changes in consumption patterns from direct spending to online shopping.

Ramayana

PT Ramayana Lestari Sentosa Tbk closed its eight supermarket outlets on August 28, 2017. The closing stores are R098 (Gresik), R030 (Banjarmasin), R115 (Bulukumba), R025 (Bogor), R057 (Pontianak), and R008 (Sabang). Then there are 2 stores in Surabaya namely R222 and R214.

Quoting Ramayana's explanation to a number of media, Ramayana's management said the closure was temporary because the company was redesigning the store.

This redesign is done at the same time utilizing the time when the purchasing power is sluggish. In addition, this redesign applies to supermarket outlets, not outlets selling clothes.