Despite the contraction, several signs of Indonesia’s economic recovery began to be seen in

Q1/2021, such as the improvement in the retail sales index, consumer confidence index, and the
manufacturing PMI. Even so, the Indonesian Shopping Center Management Association (APPBI) said
that during the period of economic growth that has not really improved, the potential for
bankruptcy of the retail sector is still there and is quite high.

If you look at the development of the retail sector, several large business actors who have been
affected by the pandemic since the beginning of 2020 until now are starting to show their impact,
such as closing some or even all outlets of several retail segments. Here are some of these
entrepreneurs:

PT Hero Supermarket Tbk

Changes in market dynamics have made the trend of shopping with the hypermarket format decline
in recent years. Quote from Kompas.com, PT Hero Supermarket Tbk (HERO) decided to close all
Giant outlets in Indonesia starting at the end of July 2021. This step had to be taken because the
business strategy used had to adapt to current conditions. The closing of all Giant outlets owned by
HERO was motivated by a company that will focus its business on other trademarks, namely IKEA,
Guardian, and Hero Supermarket. HERO believes that the household appliances, health and beauty
sectors, as well as daily necessities for the upper class still have high growth potential. Therefore,
HERO closed all Giant outlets and converted 5 Giant outlets into IKEA. Then, the company will open
to 100 new Guardian outlets until 2022. Other than that, there is a negotiation process that has the
potential to transfer ownership of several Giant outlets to third parties.The following is the growth
of sales and profit from PT Hero Supermarket Tbk in the last 2 years:
Based on HERO 2020 and Q1/2021 financial reports, there was a 27% (YoY) decrease in the
company’s revenue in 2020 to IDR 8,893,785 million as compared to 2019. In addition, there was a
very significant increase in loss, reaching 4205% (YoY) or more than 40x the decline in 2019 or a loss
of IDR 1,214,602 million.

Meanwhile, based on quarterly finances, in Q1/2021, there was a 32% decrease in revenue or to IDR
1,763.106 million compared to the same period in 2020. However, there was a 96% decrease in loss
compared to the same period in 2020. This can indicate an improvement from the financial side.

PT Matahari Department Store Tbk

The other company is PT Matahari Department Store Tbk (MATAHARI). Quoted from Kompas.com,
MATAHARI will close 13 outlets of Matahari Department Stores in various regions, because their
operations burden MATAHARI’s finances in general. In total, MATAHARI has 147 Department Stores
throughout Indonesia. In addition to the 13 outlets that are certain to be closed, MATAHARI is also
monitoring 10 other outlets that are experiencing similar problems (potentially closing) because in
their current condition they are not producing enough.The following is the sales and profit growth of
MATAHARI Tbk in the last 2 years:
Based on the financial statements of MATAHARI 2020 and Q1/2021, there was a decline in the
company’s revenue in 2020 by 53% (YoY) to IDR 3,094,173 million, as compared to 2019. In addition,
there was a decrease in profit of 149% (YoY) or a loss of IDR 870.037 million. Meanwhile, based on
quarterly finances, in Q1/2021, there was a decrease in revenue by 24% or to IDR 741.402 million as
compared to the same period in 2020. However, there was an increase in loss of 1% as compared to
the same period in 2020, which can be indicated that there are not many changes from the financial
side.

PT Tozy Sentosa

In addition to the 2 listed companies above, one of the large business actors affected is PT Tozy
Sentosa (CENTRO) with Centro Department the store. Based on various sources, a few outlets of the
Centro Department Stores in a few areas such as Ambarrukmo Mall Yogyakarta, Margo City Depok,
and Bintaro Xchange have been closed.As reported by Kompas.com, the closure was carried out
after CENTRO received a lawsuit for Bankruptcy and Suspension of Obligation for Payment of Debts
(PKPU) from 5 companies. After that, the Central Jakarta District Court declared PT Tozi Sentosa
officially bankrupt on May 17, 2021. Therefore, all Centro Department outlets. The store is closed
and no longer operating.

Based on the information stated above, each business actor does have different abilities and
endurance from one another. However, if the economy does not recover soon, any business actor
will eventually collapse as well.