Dairy Farm’s Hero Group closes Giant stores in Indonesia
The company found that hypermarkets have been declining in popularity worldwide.
Dairy Farm-owned Hero Supermarket plans to close its hypermarket banner Giant in Indonesia by the end of July to improve its finances, with some converted into new outlets for its IKEA, Guardian and Hero banners, IGD reported.
The group, which currently operates 75 Giant outlets, has seen its revenue drop 34% YoY to $118m (IDR1.7t) in Q1 2021. Movement restrictions have limited its shop operating hours, whilst people shift their grocery shopping online, IGD noted.
“The declining popularity of the hypermarket format in recent years in Indonesia is also seen in global markets. This decision was not easy, but we believe this is the best decision in Hero’s long-term interest and for employees under the company,” Hero Supermarket president and director Patrik Lindvall said.
Although it is closing Giant, Hero Group intends to focus on expanding its IKEA furniture retail, Guardian pharmacy and Hero supermarket outlets. The group plans to open 100 new Guardian pharmacies by 2022 and quadruple its IKEA outlets compared with its 2020 store network.
Five of the affected Giant hypermarket outlets will be converted into IKEA stores and several others into Hero Supermarkets. For the other outlets, Hero Supermarket is closing them or negotiating transfers of ownership by the end of July.