German retail giant Metro has scrapped plans to develop outlets in Indonesia despite a positive outlook for retail sector there.
The world’s fourth-largest retailer announced in July of last year it would open its first Metro Cash & Carry in Jakarta in 2012. It planned to develop a total of 20 outlets in the country.
In a media release the group's CEO Frans Muller said it would focus on improving sales and expanding in countries where it had already developed successful business models.“We still believe Indonesia has enormous potential as one of the fastest emerging markets in the world. However, after carefully observing economic challenges as a whole, we have to prioritise our investments,” Muller said.
Bloomberg has reported the retailer cut €200m (US$261m) from its capital expenditure after it suffered a net loss of €82m this quarter on top of a €3m loss in the preceding year.
According to the Jakarta Post, the Indonesian retail market is one of Asia’s largest. The Indonesian Retailers Association estimates retail in the archipelago will grow by about 15 percent this year to Rp138tr US$15.04bn
