Entrepreneurs Confess: Every Day, 2 Retail Stores Bankrupt Due to Corona


JAKARTA, KOMPAS.com – Chairman of the Indonesian Retail Entrepreneurs Association (Aprindo) Roy Nicholas Mandey said that one to two retail stores were closed every day due to bankruptcy triggered by the Covid-19 pandemic.

“The indicator data for 2020 is that five to six supermarkets must close. Then, in 2021 there will be one to two shops closed every day,” said Roy Nicholas Mandey, quoted from Between, Friday (23/7/2021).

Roy explained that many retail stores were closed due to loss of turnover because they were unable to balance operating costs with revenue.

The policy of limiting community activities until the Covid-19 pandemic which is still not under control has caused many retail stores to go bankrupt. In 2020, there will be around 1,300 supermarkets closed across Indonesia. Then, there are around 200 shops that will also be closed until June 2021.

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The retail business has a great influence on the national economy. In 2019, Indonesia was ranked in the world’s top five with market cap retail value of 326 billion US dollars.

“If it is eroded and affected how big multiplier effect-him,” Roy said.

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He further asked the government to understand the conditions experienced by retail entrepreneurs in Indonesia.

He also asked the government to allow all retailers to open when the PPKM policy was lifted on July 26, 2021.

“We ask that it can be opened on July 26. PPKM level IV will continue to increase or decrease, we ask the government to open it,” said Roy.

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Meanwhile, General Chairperson of the Indonesian Shopping Center Management Association (APPBI) Alphonzus Widjaja said that the implementation of Community Activity Restrictions (PPKM) in Java to Bali had reduced non-food retail turnover by between 85 and 90 percent.

According to him, the contribution of digital trade is only 10 to 12 percent, while the rest is forfeited with no turnover.

“Food retail has eroded by 40-45 percent from the period before the Emergency PPKM. The condition is very easy to see if this retail business is still alive or not, this retail business has been bloody, has difficulties, and has never received priority,” said Alphonzus.

Salary subsidy

His party also asked the government to subsidize 50 percent of salaries for workers because the Emergency PPKM policy requires shopping centers or malls to be completely closed.

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“We hope that the government can help subsidize employees’ salaries by 50 percent, more or less, this subsidy does not need to be given to shopping centers but can be directly given to workers through, for example, BPJS Employment or other mechanisms,” he said.

According to Alphonzus, the salary subsidy will greatly help his party to prevent layoffs. The reason is that shopping centers cannot operate at all with the Emergency PPKM policy which has been in effect since July 3, 2021.

He explained that some of the workers in the shopping center have been laid off, although they are still being paid in full. The dismissal of employees was carried out because shopping centers still had to be closed in line with the Emergency PPKM policy.

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“The second stage, if PPKM is extended, workers will be laid off with salaries not paid in full and the last option is layoffs. This depends on how long the Emergency PPKM lasts. We hope this third option does not have to happen,” he said.

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Alphonzus hopes that the government can also provide relaxation and other subsidies, such as electricity, gas, advertisement tax to Land and Building Tax (PBB).

According to him, these costs must be borne by the entrepreneur in the same amount. Even though shopping centers are not allowed to open.

“We fully support the government’s policy, but we also hope that the government can help shopping centers,” he said.

“At the time of this Emergency PPKM, we had to provide a lot of policy assistance to tenants because they couldn’t operate, but on the other hand, a lot of the costs still had to be borne, the value did not change even though the shopping center was closed,” he said.

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With these dependents, Alphonzus said that the company’s financial condition was getting tougher. Since 2020 the company has used reserve funds to support operations.

“It’s true that before the spike in positive cases, in the first semester of 2021 the conditions were better than 2020 but in the first semester yesterday, only 50 percent of operations were allowed so there was still a deficit. So after having no reserve funds, entering 2021 without reserve funds the condition was still in deficit plus Emergency PPKM ,” he said.

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Alphonzus also assessed that the Emergency PPKM policy did not only affect shopping centers or tenants but also many non-formal businesses in the vicinity, ranging from small stalls, motorcycle taxis, boarding houses to parking which really depend on the workers at the mall.

“As long as the shopping center closes they lose their customers, the employees at the shopping center,” he said.

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