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March 2017

The Retail Sales Survey confirmed an uptick of annual retail sales in March 2017

compared to conditions one month earlier, indicated by an increase in Real Sales

Index (RSI) growth from 3.7% (yoy) in February 2017 to 4.2% (yoy). Stronger

retail sales primarily affected foods, with growth accelerating from 5.1% (yoy) to

7.1% (yoy) in the reporting period. In contrast, retailers reported slower growth

of non-food sales, declining from 1.8% (yoy) to 0.3% (yoy) over the same period.

Regionally, retailers in most of the cities surveyed confirmed an annual RSI

upswing, especially in Manado.

Respondents predicted the sales gains to persist into April 2017, with RSI growth

accelerating to 5.4% (yoy) on the previous period, driven by foods at 9.2% (yoy),

while growth of non-foods was predicted at just 0.1% (yoy).

The survey also revealed that retailers predicted an accumulation of inflationary

pressures on goods and services in June 2017, with the corresponding 3-month

Price Expectations Index (PEI) jumping from 140.4 to 149.7. In contrast, the

respondents expected milder inflationary pressures in September 2017, with the

6-month PEI observed to fall from 131.3 the month earlier to 130.3.

Real Sales in March 2017

Respondents confirmed an uptick of annual retail sales in March 2017

compared to conditions one month earlier, indicated by a Real Sales Index (RSI) of

204.0 as growth accelerated from 3.7% (yoy) in February 2017 to 4.2% (yoy) (Graphs

1 and 2). Stronger retail sales affected foods, with growth accelerating from 5.1%

(yoy) to 7.1% (yoy) in the reporting period. In contrast, retailers reported slower

growth of non-food sales, declining from 1.8% (yoy) to 0.3% (yoy) over the same

period, primarily on the back of information and communication equipment,

particularly electronics (audio/video), for which growth was confirmed to decelerate

from 6.1% (yoy) in February to 2.3% (yoy) in March 2017.

RETAIL SALES SURVEY

Respondents confirmed an uptick of annual retail sales

in March 2017.

Methodology The Retail Sales Survey has been conducted monthly to acquire early information concerning GDP trends from a private consumption perspective. The Retail Sales Survey was first conducted in September 1999 and in January 2015 the survey involved 700 retailers as respondents using purposive sampling in ten cities, namely Jakarta, Semarang, Bandung, Surabaya, Medan, Purwokerto, Makassar, Manado, Banjarmasin and Denpasar. The index is calculated using commodity and city weights, where commodity weights based on the Input-Output (I-O) table, while city weights based on the share of household consumption in Gross Regional Domestic Product (GRDP) to household consumption in Gross Domestic Product GDP. Currently, panel respondents are grouped according to seven KBLI (Indonesian Standard Industrial Classification) established in 2009. The real index presented with 2010=100 as the base year (previously 2000=100). Meanwhile, general price projections calculated by using the balanced score method (net balance + 100) using city weights according to the Cost of Living Survey (SBH).

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Graph 1. Real Retail Sales Index

Graph 2. Real Sales Growth

According to the latest monthly data, the previous -4.9% (mtm) real sales

growth contraction posted in February 2017 to achieve positive 3.5% (mtm) in the

reporting period. The increase affected all commodity groups, especially other goods

(7.2%, mtm) in the form of clothing (4.1%, mtm).

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Graph 3. Real Sales Annual Growth of Food & Non Food Commodity Groups

Graph 4. Real Sales Annual Growth of Motor Vehicles Spareparts and Fuels Commodity Groups

Graph 5. Real Sales Annual Growth of Information & Comm. and Other Household

Equipment Commodity Groups

Graph 6. Real Sales Annual Growth of Cultural & Recreation and Other Goods Commodity Groups

Real Sales Expectations for April 2017

Respondents predicted the Real Sales Index (RSI) at 208.8 in April 2017, with

growth accelerating from 4.2% (yoy) the month earlier to 5.4% (yoy) (Graphs 1 and

2). Retailers expected food sales to increase from 7.1% (yoy) in March to 9.2% (yoy)

in April 2017, bucking the downward trend of non-food sales, sliding from 0.3%

(yoy) to 0.1% (yoy) over the same period. Respondents predicted the annual real sales

downturn to affect cultural and recreational goods, for which growth was expected

to moderate from 3.5% (yoy) to 0.5% (yoy) in the reporting period.

Nonetheless, retailers predicted weaker real sales growth in April 2017,

decelerating from 3.5% (mtm) to 2.3% (mtm). Weaker sales affected several

commodity groups, particularly automotive fuels (-1.2%, mtm), followed by

information and communication equipment (-0.9%, mtm).

Respondents predicted stronger real sales in

April 2017.

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Regional Real Sales

In March 2017, retailers in most of the cities surveyed confirmed an annual RSI

upswing, especially in Manado, where annual RSI growth improved considerably from

a -26.9% (yoy) contraction in February to record positive 10.8% (yoy) growth in

March 2017, followed by Jakarta, where growth was reported to accelerate from

21.0% (yoy) to 37.7% (yoy). In April 2017, however, retailers in Semarang reported

solid annual RSI gains, followed by Medan, increasing respectively from 1.7% (yoy)

and 0.6% (yoy) to 15.6% (yoy) and 6.4% (yoy) (Graph 7).

Graph 7. Performance of Real Sales Growth (YoY) in Jakarta, Manado, Semarang (incl Purwokerto) and Medan

Price Expectations for the Upcoming Three and Six Months

Retailers predicted an accumulation of inflationary pressures on goods and

services in June 2017 due to increased public demand during the holy fasting month

of Ramadhan and Eid-ul-Fitr. Accordingly, the corresponding 3-month Price

Expectations Index (PEI) jumped from 140.4 to 149.7 (Graph 8). Nevertheless, survey

respondents also expected milder inflationary pressures in September 2017, with the

6-month PEI observed to fall from 131.3 the month earlier to 130.3 (Graph 9).

In March 2017, retailers in Manado experienced the

strongest annual RSI upswing.

Retailers predicted an accumulation of

inflationary pressures on goods and services in

June 2017.

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Graph 8. Price Expectations Index for the Upcoming Three Months

Grafik 9. Price Expectations Index for the Upcoming Six Months

Sales Expectations for the Upcoming Three and Six Months

Respondents predicted an upturn in retail sales during the next three months

(June 2017), evidenced by an increase in the 3-month Sales Expectations Index (SEI)

from 134.8 to 154.3. Retailers were upbeat on the seasonal spike in demand during

Ramadhan and Eid-ul-Fitr. Conversely, retailers expected more muted real sales in

September 2017, reflected by a drop of 7.5 points in the 6-month SEI from 144.6 to

137.1 (Graph 10).

Graph 10. Sales Expectations Index for the Upcoming Three and Six Months

Respondents predicted a retail sales upturn in

June 2017.

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Appendix

Table 1. Real Retail Sales Index by Categories

Table 2. Growth (y-o-y) of Real Retail Sales Index

Table 3. Growth (m-t-m) of Real Retail Sales Index

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Table 4. Real Sales Index by City

Table 5. Annual Growth (y-o-y) of Real Sales by City

Table 6. Monthly Growth (m-t-m) of Real Sales by City

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Table 7. Expectations for Prices and Sales