German-based retail giant Metro Group has cancelled its expansion plans in Indonesia after a dismal financial performance this quarter, reports The Jakarta Post.
The group suffered a net loss of US$104m – a plunge from a US$3.8m loss a year earlier. Metro Cash & Carry CEO Frans Muller said that the retail group had therefore decided to focus on improving its sales figures in existing markets and accelerating expansion in selected countries where it had developed a good business model.
“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 in a press statement.
Metro Group’s business partner in Indonesia, investment company Sintesa Group, also agreed to put expansion plans on hold.
The cancellation comes almost a year after Metro Group’s July 2011 announcement that it would open its first Metro Cash & Carry outlet in Jakarta by 2012.
The planned wholesale retail outlet was supposed to be the first of about 20 planned retail outlets in Indonesia, according to the report.
Indonesia’s retail market is one of the largest in Asia, the article said. The Indonesian Retailers Association (Aprindo) estimates that the country’s retail business will grow by about 15 per cent this year to US$15.04bn.