June 20, 2014 11:50 pm JST

Indoritel targets 10,000 convenience stores by year's end

WATARU SUZUKI, Nikkei staff writer

JAKARTA -- Indoritel Sukses Makmur Internasional, the Indonesian investment firm with majority stakes in some of the country's biggest retailers, plans to accelerate expansion of its convenience store network to keep pace with demand from the country's growing middle-income consumer group.

     President Harjono Wreksoremboko told reporters on Thursday that the subsidiary operating Indomaret, one of the country's most popular store brands, will add 1,800 stores this year following over 1,570 last year  - bringing total Indomaret outlets to more than 10,000 across the archipelago. The company added 469 stores in the January to March period alone.

     Wreksoremboko says the company sees better growth potential in second-tier cities where the market is less saturated. In Jakarta, the capital, competition is fierce and the company plans to close unprofitable stores.

     The Indomaret expansion plan outpaces its biggest rival, Sumber Alfaria Trijaya, operator of Alfamart convenience stores.  Indomaret and Alfamart between them control more than 60% of the Indonesian convenience store market.

     Indoritel changed its name from Dyviacom Intrabumi last year, and is controlled by a subsidiary of Indonesian conglomerate Salim Group. Indoritel also owns major stakes in Nippon Indosari Corpindo, Indonesia's biggest bread producer, and Fastfood Indonesia, which operates Kentucky Fried Chicken franchises in the country.