Retail Sales Predicted to Remain Solid in July 2023

Respondents of the latest Retail Sales Survey conducted by Bank Indonesia (BI) expect retail sales to remain solid in July 2023.

IDXChannel - Respondents of the latest Retail Sales Survey conducted by Bank Indonesia (BI) expect retail sales to remain solid in July 2023, as reflected by a Real Sales Index (RSI) of 212.7, accompanied by positive growth of 6.3% (yoy). 

"Solid retail sales performance is driven by Food, Beverages, and Tobacco as well as Clothing, for which growth remained in positive territory, as well as improving sales of Spare Parts and Accessories," said BI Communication Department Executive Director Erwin Haryono said in a media release on Wednesday (9/8/2023).

On a monthly basis, however, respondents predict a 4.6% (mtm) retail sales contraction in July 2023, with Food, Beverages, and Tobacco followed by Cultural and Recreational Goods as well as Automotive Fuels expected to experience declines as demand normalises after the recent school holidays, national religious holidays, and collectively leave days.

In June 2023, the Real Sales Index (RSI) expanded 7.9% (yoy) to a level of 222.9 after contracting 4.5% (yoy) the month earlier.  

"Respondents confirmed broad-based growth across most commodity groups, led by Food, Beverages, and Tobacco, followed by Automotive Fuels and Clothing," he stated.

On a monthly basis, retail sales improved to record a shallower 0.3% (mtm) contraction in the reporting period, dominated by Clothing, followed by Food, Beverages and Tobacco, as well as Cultural and Recreational Goods given increasing domestic sales in response to retail discount strategies, uninterrupted distribution, and increasing demand during the national religious holidays, along with mid-season sales as well as the recent school holidays.

In terms of prices, respondents anticipate milder inflationary pressures in September 2023 before escalating in December 2023 in line with sales expectations moving forward, as indicated by a decrease in the 3-month Price Expectations Index (PEI) to 115.9 from 117.7 and an increase in the 6-month PEI to 130.0 from 123.0. (WHY)