Indonesian hypermarket chain Matahari Putra Prima was apparently so ashamed of its financial performance last year it issued a press release about its results without a single financial detail included.
A little sleuthing online reveals the struggling giant – whose interests also include fashion stores – reported a loss of 1.24 trillion rupiah last year (US$86.8 million), compared to a net profit of 38.48 billion rupiah last year ($2.7 million).
In its media statement, MPP described last year as a “challenging yet successful” period of consolidation for the company, amidst what continues to be a challenging macroeconomic and competitive landscape.
“This consolidation and cost restructuring is a part of the company’s efforts to transform its business and will position itself strongly for the year to come. The macroeconomic condition in 2017 continued to be challenging, especially for the retail sector.”
MPPA blamed its misfortunes on factors including the removal of electricity subsidies from 19 million Indonesian households and relatively low inflation-adjusted minimum wage increase which adversely affected Indonesian consumers’ spending power.
“Furthermore, the company experienced increasing competition from local supermarkets across Indonesia.”
In response, the company launched “a bold pricing strategy” and re-examined its cost structure to support a lower merchandise-margin environment by looking at a number of operational efficiencies.
“These include headcounts, assortment reviews with a goal to focusing on fast moving and productive SKUs, a review of operational costs including a shift of marketing spend from expensive nationwide media advertising to more cost-effective community based marketing and the development of a low-cost store format.”
Without stating figures, the company said those initiatives placed considerable pressure on its performance in 2017 with some once-off costs being accounted for in that period.
“The company expresses optimism for 2018. The new strategy along with all actions taken in 2017 should begin to pay off, allowing the company to strengthen its market leadership in food retailing business in Indonesia. The company has built a reputation for entrepreneurship and leadership, and is obsessed with customer satisfaction, innovation and excellence in operations.”