Electricity tariff rise led to unease in retailers

JAKARTA. The series of tariffs rise, starting from the removal of electricity subsidy at the segment of 900 volt ampere (VA) until increase in cigarette excise by average of 10.54% are predicted to reduce consumers’ purchasing power.

General Manager of Corporate Communications of Transmart Carrefour Satria Hamid said, the government policies may affect to retailers’ sales. Let alone, the sales usually tend to be stagnant in quarter I. “The moment of Imlek (Chinese New Year) will slightly drive the market. After that, the market will tend to be stagnant until Lebaran (Iedul Fitri ),” he told KONTAN, Tuesday (3/1). The tariffs rise will lead consumers to reconsider their households’ budget.

In anticipating that trend, Transmart Carrefour will cooperate with the suppliers to maintain the price. The goods will be circulated with thin margin so that the goods are expected to sell well.

Quarter I may be positive

Investor Relations of PT Ramayana Lestari Sentosa Tbk (RALS) Aloysius Santosa admitted that Ramayana’s sales usually tend to low in quarter I. He agreed that Imlek can stimulate sales in January 2017.

However, Ramayana will continue to boost the sales in ther early periods of 2017 by maintaining the existing prices. Ramayana will also continue conducting promotion and productivity programs to balance the increase in operating costs, Aloysius added.

Chairman of the Association of Indonesian Retail Merchants (Aprindo) Roy N.Mandey said, actually the removal of electricity subsidy for the segment of 900 VA will not significantly affect to purchasing power reduction. This is because most of the consumers of this segment come from middle class, or even middle-low class.

The situation will be different if the increase in electricity tariff is followed with the increases in all energy components, such as fuel. Therefore, he is optimistic that retail business in the first quarter of 2017 will be positive. (Muhammad Farid/Translator)