Starbucks Indonesia Operator Sees Sales Boost From Spending
(Bloomberg) -- PT Mitra Adiperkasa, the Indonesian operator of global brands including Starbucks, Zara as well as Marks & Spencer, is predicting that a recovery in consumer spending will sustain its highest revenue growth in three years.
The retailer forecasts a revenue increase of 15 percent for a second year as consumers splurge more on Inditex SA’s Zara-branded clothes and Tumi Holdings Inc.’s suitcases. The company will add 200 new stores this year, including 60 Starbucks Corp. outlets, Corporate Secretary Fetty Kwartati said.
The bullish outlook from Indonesia’s biggest lifestyle store operator mirrors official forecast of a revival in private consumption and investment supporting economic growth in the world’s fourth-most populous country. Mitra Adiperkasa is betting that demand for Starbucks beverages will grow among the fast-swelling ranks of middle-class and affluent Indonesians, just as it has in neighboring Philippines and Thailand.
“We are confident about the potential of Starbucks in Indonesia over the next five to 10 years and that’s why we are accelerating the expansion,” Kwartati said. “We are more optimistic about 2018 as we expect a turnaround in the macroeconomic conditions.”
Consumer confidence remains near record high despite falling for two months in a row, according to a Bank Indonesia index. The trillion dollar economy is forecast to expand 5.4 percent this year, the quickest pace of growth since 2013, according to the Finance Ministry.
Mitra Adiperkasa operates Indonesia’s 322 Starbucks outlets through its unit PT MAP Boga Adiperkasa Utama and plans to add 60 stores every year for the next three years, Kwartati said.
“Indonesians are coffee drinkers and it’s easier to expand than in India or China which are tea-drinking countries,” Kwartati said.
Revenue at the Jakarta-based Mitra Adiperkasa rose 15 percent last year to 16.3 trillion rupiah ($1.18 billion), while its net income jumped 61 percent to 334.7 billion rupiah, the highest in five years. Starbucks’ sales is the biggest contributor to MAP Boga Adiperkasa’s revenue, company data show.
“Last year we guided for 13 percent revenue growth and ended the year with 15 percent,” Kwartati said in an interview on April 3. “This year we are confident enough to come out with 15 percent growth estimate as we see improvement in consumer spending.”
The company’s guidance is ahead of a consensus estimate of 12 percent for revenue growth, according to data compiled by Bloomberg. Net income this year may soar 63 percent to 545 billion rupiah, data show.
Shares of Mitra Adiperkasa have rallied 31 percent this year, compared with a 2.7 percent retreat for the benchmark Jakarta Composite Index, while MAP Boga are 11 percent higher since its listing in June last year.
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