Trade Minister: Modern Retail Expansion Won't Eradicate Local Corner Shops

TEMPO.CO, Jakarta - Modern retail expansion will not replace local grocery stores, said Indonesian Minister of Trade Budi Santoso. "There's been no problem thus far with the partnership model," he said on Thursday, March 5, 2026.

Budi explained that modern retailers such as Alfamart and Indomaret have actually established partnerships with small-scale grocery stores or MSMEs since 2015 through goods supplies and marketing MSMEs' products.

The Association of Indonesian Street Vendors (APKLI) previously reported the modern retail expansion to the Minister of Cooperatives Ferry Juliantono.

APKLI also reported about the implementation of Presidential Regulation No. 112 of 2007 and the 2015 Economic Policy Package. APKLI head Ali Mahsun urged for the realization of the provisions outlined under the regulation, including one concerning the building area of modern retail stores. 

Under the regulation, minimarkets must be less than 400 square meters, supermarkets from 400 to 500 square meters, and hypermarkets over 5,000 square meters.

Ali also highlighted the partnership status regulations, which require modern stores and shopping centers to partner with MSMEs in marketing products. He reminded that the 2015 Economic Policy Package, which simplifies modern retail licensing, should not sacrifice the existence and competitiveness of small businesses.

According to him, the rapid growth of modern retail since 2015 has had a negative impact on many traditional corner shops, reducing their number. APKLI noted that in 2025, the number of traditional grocery stores is around 3.9 million, far below the 5.1 million in 2015.

"We are not hostile to modern retail, but we want the people's economy to thrive and regain economic sovereignty," said Ali in a written statement on Thursday, February 26, 2026.

Read: Red and White Cooperatives May Partner with Indomaret and Alfamart, Says Minister

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