Indonesian retail giants close down due to pandemic impacts

Indonesian retail business players Giant and Centro are reportedly closing down their business this year after 15 months of struggle to survive the pandemic. Hundreds of retail businesses have shut down in Indonesia over the past 15 months, according to the Indonesian Retailers Association (Aprindo).

Centro, a retail brand under PT Tozy Sentosa, has closed its stores and was declared bankrupt by the Central Jakarta District Court on May 17 after most of its creditors rejected the company’s peace plan.

Meanwhile, PT Hero Supermarket Tbk (HERO) on 25 May announced that it will close down all Giant stores this year. Five stores will be converted into IKEA, while the remainder will be converted into Hero Supermarket. The company’s decision to convert five Giant stores into IKEA is a strategic follow-up move to focus more on the development of the three brands under the company, namely IKEA, Guardian and Hero.

Aprindo Chairman Roy Nicholas Mandey said the closure of Giant and the bankruptcy of Centro marked a new low in the modern retail industry in Indonesia. The pandemic caused a huge change in consumer behaviour, in which they now prefer minimarkets and specialty stores to hypermarkets due to social mobility restrictions.