Idul Fitri Bonuses to Boost Retail Commerce

Retail businesspeople are optimistic that sales during the Ramadhan fasting month and Idul Fitri holiday will be even higher this year on account of Idul Fitri and annual bonuses.

KOMPAS/TOTOK WIJAYANTO

People shop for clothes at Kranji Market in Bekasi, West Java, on Thursday (24/5/2018).

JAKARTA, KOMPAS – Retail businesspeople are optimistic sales can grow 20-35 percent in Ramadhan and Idul Fitri this year. The government’s disbursement of Rp 35.76 trillion (US$2.54 billion) in Idul Fitri and annual bonuses for civil servants, police and military personnel as well as state pensioners is expected to boost consumption.

The optimism was expressed by, among others, Indonesian Shopping Center Tenants Association (Hippindo) chair Budihardjo Iduansjah and Indonesia Retailers Association (Aprindo) chair Roy N Mandey. Both set a target of two-digit growth this year.

“Hippindo targets growth of 20-30 percent this year. Growth was only 10 percent in the same period last year,” Budihardjo said on Sunday (27/5/2018).

Fashion products are expected to be the biggest contributor to the growth. Fashion product sales are expected to increase two-fold, while consumer goods’ sales are expected to grow 15 percent. Last year, Hippindo said its members booked total revenue of between Rp 500 trillion and Rp 600 trillion.

Meanwhile, Aprindo has set a retail performance growth target of 25-35 percent (month-on-month) and 9-10 percent (year-on-year). “Last year, growth was only 4-5 percent in Ramadhan and Idul Fitri,” Roy said.

According to him, the growth last year was equal to Rp 5 trillion – Rp 6 trillion. This year, he said that Aprindo hoped to book Rp 10 trillion – Rp 11 trillion in Ramadhan and Idul Fitri sales revenue. Aprindo’s mainstay products are food.

“Food is the biggest contributor, followed by clothes. The gap between the two is 2-3 percent,” Roy said.

Previously, retailer PT Ramayana Lestari Sentosa corporate secretary Setyadi Surya said the company targeted growth of 7.3 percent in May-June this year, which will contribute to 40 percent of its annual revenue.

“We hope that the Idul Fitri and annual bonuses will help us reach the target,” PT Ramayana Lestari Sentosa director Suryanto said on Friday last week.

Sogo Indonesia managing director Handaka Santosa said he was optimistic. He said the company would provide food courts, bookshops and children playgrounds to prevent any business lull post-Idul Fitri.

Finance Minister Sri Mulyani Indrawati said Idul Fitri and annual bonuses could hopefully boost spending. However, the ministry has yet to set an estimate.

Bonus for contracted employees

Apart from state officials, civil servants and pensioners, the government has announced that it will also give Idul Fitri bonuses to contracted employees in central government institutions. The government has allocated Rp 440.38 billion for this purpose. Contracted employees will receive a month’s worth of payment as Idul Fitri bonus.

However, there are concerns that the disbursement of Idul Fitri bonus for contracted employees on central government institutions may trigger demands from similar employees in regional government. The decision may also reopen an old wound of chaotic personnel administration system in central and regional governments.

Regional Autonomy Watch (KPPOD) executive director Robert Endi Jaweng said in Jakarta on Sunday (27/5/2018) that the disbursement of Idul Fitri bonus for central government’s contracted employees would trigger demands from contracted employees in regional governments. Regions with limited budget will face problems.

“This Idul Fitri bonus to contracted employees is not exactly a major budgeting issue. However, there is a fundamental issue that has never been resolved. The root is the chaotic personnel administration system in central and regional governments,” Endi said.

This may be a complicated problem as the issue of contracted employees has often been politicized. Patrons in a number of contracted employee associations are politicians.

Finance Ministry spokesperson Nufransa Wira Sakti said that contracted employees in central government agencies, including secretaries, security guards, drivers, janitors and maids were eligible for one month’s payment as Idul Fitri bonus.

The budget for contracted employees’ Idul Fitri bonus will be taken from their respective office’s budget, specifically in the operational expense budget. This is different from the allocation for Idul Fitri bonuses for state employees, which will be taken from the personnel expenditure budget.

Currently, all central government agencies have begun processing the bonus payment.

(LAS/JUD/IGA)