RETAIL SALES SURVEY. March 2017

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1 RETAIL SALES SURVEY 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 to In contrast, the respondents expected milder inflationary pressures in September 2017, with the 6-month PEI observed to fall from the month earlier to Real Sales in March 2017 Respondents confirmed an uptick of annual retail sales in March 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 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 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 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). 1

2 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). 2

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.

3 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 stronger real sales in April Respondents predicted the Real Sales Index (RSI) at 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). 3

4 Regional Real Sales In March 2017, retailers in Manado experienced the strongest annual RSI upswing. 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 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 to (Graph 8). Nevertheless, survey respondents also expected milder inflationary pressures in September 2017, with the 6-month PEI observed to fall from the month earlier to (Graph 9). 4

Respondents predicted an upturn in retail sales during the next three months (June 2017), evidenced by an increase in the 3-

5 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 a retail sales upturn in June 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 to 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 to (Graph 10). Graph 10. Sales Expectations Index for the Upcoming Three and Six Months 5

6 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 6

7 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 7

8 Table 7. Expectations for Prices and Sales 8

RETAIL SALES SURVEY. December Graph 1. Real Retail Sales Index

RETAIL SALES SURVEY. December Graph 1. Real Retail Sales Index RETAIL SALES SURVEY December 2016 The Retail Sales Survey confirmed stronger annual sales growth on December 2016, with the Real Sales Index (RSI) accelerating from 9.9% (yoy) the month earlier to 10.5%