1. How will the decision to ban the Idul Fitri mudik (exodus) help the retail market in Jakarta?
The months of Ramadan and Eid are always a pretty good time for retail. The number of people who visit shopping centres usually increases quite significantly. In the current conditions, with the addition of a ban on Idul Fitri Mudik (exodus), people will not have many options for travel or recreation, which is why shopping centres might see an increase in the number of visitors.
Shopping centers may see good traffic and performance improvements. Also, during this period, retailers and shopping centre operators usually come up with discount programmes to ensure people visit their shopping centres or retail spaces, respectively.
According to the Chairman of APPBI, Alphonzus Widjaja, (click here to access the article), an increase of up to 40% in retail business cannot be ruled out. This means the improvement is likely to happen and this is good momentum for the retail market.
2. Will the improved retail performance during Ramadan and Eid become the start of the retail market recovery?
Retail sales performance usually peaks during Ramadan and Eid. So, retailers will benefit from the Ramadan and Eid season. Even in current conditions, retail performance is projected to increase, although not as significantly as before the pandemic.
The momentum needs to be maintained, so that after the Ramadan and Eid season retailers continue to have a steady sales performance. We expect that after Ramadan and Eid retail sales will fall, just like any other year, but retailers should develop strategies to make sure sales do not fall to the low numbers experienced since the start of the pandemic.
Some additional factors should help the retail sector recover faster. The increased number of people being vaccinated, and the strict adherence to health protocols by shopping centre operators and retailers, should increase people’s confidence in visiting shopping centres. This will have a positive influence on retail performance and a positive impact on shopping centres.
3. What opportunities do developers and tenants have while retail is in a good condition?
After the Ramadan and Eid season, retailers can reflect on their performance. If, within a few months of the Ramadan and Eid season ending, sales figures are considered stable, the incentives or discounts given by landlords to retailers can be reassessed, and leases can start to return to normal. However, for retailers in certain segments that continue to struggle to increase sales, landlords should remain flexible in terms of the rent and service charge paid.
Apart from that, for retailers that are just about to open or operate, times like Ramadan and before Eid offer opportunities to generate great sales. We all know that shopping intensity increases during this holy month. It is also a good opportunity to continue offering discounts and engage in other sales tactics considered effective in attracting visitors to shopping centres.
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