Carrefour ‘Reenergizing Local Economy’

By William J. Furney
The Bali Times

Jl. SUNSET ROAD, Kuta ~ The opening of a multimillion-dollar store by French retail giant Carrefour in Bali has been delayed as the company awaits permits from the local government, but a corporate official at the firm’s headquarters in Jakarta says the hypermarket’s arrival here will alter and “reenergize” the economy.

The large retail outlet, of which the shopping area is just over 8,000 square meters and also includes a mall of half that size, is now expected to open by the end of April, corporate affairs director Irawan Kadarman told The Bali Times.

As previously reported by The Times, Carrefour, which is leasing the land it occupies, was due to open in Bali in March.

“Principally, when we open a new store, we have to make sure that we meet all prevailing regulations applicable in the city, province or country in which we operate. In the case of Bali, as of now, we are still in the process of completing all those requirements,” Kadarman told The Times.

“We were indeed aiming at late first quarter 2007.”

Critics of the Carrefour store in Bali have said the behemoth – the world’s second-largest retail chain after Wal-Mart of the United States – would cause smaller stores in the area to close, resulting in higher unemployment.

Others have pointed to the design of the new building, saying it lacks Balinese aspects mandated by the government.

Kadarman said, however: “I’d prefer concerns from local retailers as opposed to objections.”

Carrefour, which has 29 hypermarkets in Indonesia, mostly in Jakarta, told The Times it invested Rp120 billion (US$13.1 million) in the new Bali outlet and had employed some 800 local employees.

“We engage approximately 500 direct employees and around 300 indirect employees such as sales promotion persons, trolley persons, security, or cleaning,” said Kadarman.

“Whenever we open a store, our hiring policy is qualification. However, our main priority is surrounding people – people living around our store – and local, in this case Balinese people.

“In addition, we partner with more than 100 local suppliers in which almost all of them can be categorized as small-medium enterprises.”

Although the store had not yet opened, all staff remained on the payroll, said Kadarman.

“Yes indeed they have been recruited and obviously we honor what has been signed in the employment contract,” he said.

Part of the delay in opening was a traffic study that had to be conducted to determine if the expected huge influx of shoppers would cause gridlock on busy Jl. Sunset Road, Kadarman said.

Bali’s booming economy was what attracted Carrefour, to strong potential for business growth here, he added.

“The reason why we are opening a store in Bali is the same reason why we open stores in other locations – that is, the city, in this case the island, provides opportunities for growth. We view the investment climate in Bali as promising, and so we decided to make an investment.”

Carrefour projects its presence in Bali will change the retail dynamic – for the better – and force other retailers to spruce up their businesses and provide a wider array of goods at lower prices.

“First and foremost is that our presence will provide consumers with more choices in terms of shopping … Secondly, as we always want to ensure that products that we offer are of best quality, it’ll stimulate suppliers to continue enhancing their products.

“This will not only benefit consumers, but also will make locally produced products even better in terms of quality. These better-quality products made by more efficient suppliers would open up new opportunities for them to expand their market by utilizing our network, at least in Indonesia.

“Thirdly, as retailers could emulate each other’s best practices, in the end, everyone, including us, of course, will do their utmost to improve atmosphere of their stores. Again, it’ll benefit consumers. In short, I’d say the landscape would become more dynamic … our presence could also attract other investors and this, in turn, could further reenergize the local economy.”

Long-established retailers here are worried about the impact Carrefour will have on their sales.

Near to the Carrefour site, Alfa supermarket on Jl. Imam Bonjol, which employs 200 people, will feel the effects, according to manager Wayan Gede.

“Carrefour will definitely be a competitor for local retailers, especially Alfa, because we’re in the same area,” he told The Times.

“Their arrival means another rival to share the small amount of consumers. Currently, we have an average of 2,500-2,600 customers a day, about 5 percent of whom are expatriates,” he said.

One Alfa customer said she would switch to Carrefour if it offered better products.

“I haven’t heard about Carrefour. I always shop here, so I’ll see. Of course I’ll go there, and if it’s better than Alfa, I’ll do my shopping there,” said Gudesa Sri Utami, 20, who is employed in the tourism sector.

Another, Sugano, 39, a villa employee, was aware of the French retailer and eagerly awaiting its opening.

“I know about Carrefour. It has more products and is also cheaper. I used to shop at Carrefour when I was in Jakarta. I think more people go to Carrefour than any other place. I’ll definitely move to Carrefour if they are really going to open in Bali,” he said.

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