JAKARTA. The plan to close six Giant outlets in July raises questions about the fate of the company that owns them, Hero Supermarket Tbk.
The six outlets that will be closed are located in Cinere Mall, Mampang, Pondok Timur, Jatimakmur, Cibubur, and Wisma Asri. As a result, huge discounts are applied in those outlets, which attracts customers tempted by the low prices.
Giant is part of Hero Supermarket Tbk (Hero). The company was founded in 1971 and has several brands, including Giant, Guardian (Health and Beauty), and IKEA (Furniture) At present, as quoted from the company's Q1 2019 financial report, HERO generated a net income of Rp 3.06 trillion, 0.5% higher than the record from Q1 2018. However, the company still suffered a net loss of Rp 3.52 billion.
Based on the company's report, the revenue of the non-food segment actually increased by 21% to Rp 715 billion. However, the revenue of the food segment declined by 5% to Rp 2.345 trillion.
In the financial report, President Director Patrik Lindvall said that declining food and beverage sales were caused by a store consolidation plan, which was done to consolidate productivity and profits.
Based on its track record, Hero plans to focus more on the non-food sector, particularly on IKEA.
Lindvall said that the company is planning to turn one Giant hypermarket into an IKEA store, in addition to building a new store in Jakarta Garden City and Bandung which can begin to operate in 2020. (AR/AR)