Business Format Overview
MPPA’s core retail business is still being contributed by Hypermart, which delivered 85.7% of the total revenue in 2022. Hypermart is one of the Indonesia’s modern retail hypermarkets for the growing middleincome family nationwide, with an extensive product selection covering Grocery, Fresh Food, Bazaar, Softlines and Electronics merchandise. Hypermart has its competitive advantages as the results from our capabilities developed through intensive retail & customer studies, detailed sales and profitability analysis by SKU as well as a nationwide distribution network to move products from Distribution Centers and suppliers to stores.
Within 2022, the Hypermart format was under extensive review with great priority to transform its concept into a new, more efficient modern hypermarket format with a modern shopping environment and consistent shopping experience at every store throughout Indonesia as well as to adapt into the changing shopping patronage of its valued customers. Hypermart has to remain competitive in the market while at the same time it is required to operate more efficiently to sustain its profitability.
The Company realigned the Hypermart’s format and business model into a more consumer-centric outlook with an enhanced approach to serve the consumers’ demanding needs. Significant focus was given to selection of Fresh Products, food and groceries and fast-moving household products needed by consumers daily supported with attractive prices. The continuing cost reduction and higher productivity at store level were also driven to regain Hypermart’s productivity and profitability going forward.
As the result of the transition focus, the Company was able to open 4 new stores, closed 5 stores permanently and relaunched 3 stores. By the 2022 year-end, the Company operated 100 Hypermart stores in more than 70 cities across the country.
Through its Foodmart Fresh and premium Foodmart Primo supermarket formats, the Company focuses on fresh foods, bakery, ready-to-eat (RTE) products as well as a wide variety of local and international products.
Foodmart Fresh has been expanded further to increase the focus on high quality fresh foods and provides only the freshest products to customers.Foodmart Primo offers international products, more variety of quality fresh products and a large RTE section providing eat-in or quick take-away meals, café and boutique bakery at more strategic locations of middle-upper middle segment.
In 2022, the Company open 2 new Foodmart and Primo stores, relaunched 1 store and closed 1 store permanently with a total of 20 stores actively operating at year-end.
Launched in late 2019, Hyfresh has been progressing well as the Company’s latest store format based on community supermarket concept with greater focus on fresh and groceries products to attract middle-class households within the communities for shopping daily needs. This format is aimed to become the Company’s future expansion store, in parallel with existing focus to the core Hypermart format, in reaching out to communities looking for fresh food retailing with a more efficient operation approach.
The Company believes that its unique characteristic resembling a hybrid of mini-hypermarket concept with supermarket operation with close proximity to community will be the ideal FMCG format to pursue going forward as it will fulfill the strengths of hypermarket and supermarket into one store concept for consumers looking for quality products and ease of shopping convenience in this New Normal era.
By end of 2022, the Company opened 3 brand new store while it closed 1 store permanently for a total 13 stores in operation.
Boston Healty & Beauty
Boston Health & Beauty (Boston H&B) continued to deliver good performance in 2022 with positive sales growth and profitability. Boston H&B is positioned to offer a comfortable and modern health & beauty store concept with additional health consultation services at selected stores. As we are moving into New Normal era with the rising of health consciousness and healthy living lifestyles, the Company is in the process of reinventing the total Boston H&B concept to be launched in 2022-2023.
The new concept will put Boston H&B into several store formats ranging from flagship stores with complete healthcare and beauty products as well as storein-store concept and standalone stores adjacent to community. This new concept will also be supported with online business support, which is important to provide total solution of healthcare and beauty products and consultations to consumers.
During 2022, Boston H&B open 1 new store, relaunched 2 stores and closed 5 stores permanently for a total of 51 stores in operation.
FMX convenient stores are located at strategic locations such as malls, apartments, offices, railway stations and other public places for convenient, fast purchases within local communities. FMX differentiates itself from other minimarkets with modern layouts, large ready to eat and drink sections and a wide assortment of grocery with a focus on snacks. Basic financial services such as ATM’s, cellular airtime top ups and bill payments are also offered within the stores.
The Company is optimistic that FMX offers great growth opportunities through store expansion at good, crowded location to capture its maximum potential as modern convenient stores in the future.
During 2022, the Company opened 1 new outlet, closed 2 outlets permanently with total 12 outlets operating until year-end.
|Store||Contribution to Total Sales||Net Sales (Rp billion)|
|Boston Health & Beauty||0.6%||0.6%||41||38|
Total Number of Stores
By the end of 2022, the Company's total number of stores is 196 stores. This number has decreased compared to 2021, which totaled 200 outlets as a result of the Company's strategy.
Number of Stores Based on Business Format
|Number of Stores||2022||2021|
|Boston Health & Beauty||51||55|
|Total Number of Stores||196||200|
Important Business Support
To make it easier for suppliers to distribute their products to our 196 stores network, the Company operates 4 Distribution Centers, strategically located at Balaraja - Banten, Cibitung - Greater Jakarta, Porong - East Java and Timika - Papua, encompassing 70,400 sqm of distribution space and 75,680 pallet positions.
By utilizing all transportation type (land transport for Java, Bali and South Sumatera, sea freight for outer islands and air freight for Papua), the Company summed up 30,866 trips out of which 5,834 maritime containers shipped to 23 ports across Indonesia. Overall almost 14 million cartons were handled and transferred from our DC’s to the stores, representing an overall volumes increase of 4.36% compared with the volumes shipped by the end of 2022.
The new DC in Timika (Papua) has 2 locations, Low Land and High Land DC, distribute products to all stores located in the PT Freeport Indonesia area, while MPPA’s primary DC at Balaraja, Banten, continues to distribute products to Western and Central Indonesia. In addition, Cibitung Fresh Food Distribution Center now has the leading industry-standard freezer and chiller capacity to provide higher service levels to all stores in the dairy and frozen foods categories.
Within 2022, the distribution operation management continued maintaining and developing the up-to-date technology necessary to meet merchandise supplier delivery requirements while providing world-class service levels to our customers. Current distribution technologies such as radio frequency scanning, paperless picking solutions by voice-directed (voice picking system) and single pick technology. The results in paperless, faster operations that are then extensively utilized to support the ability to use automatic data collection, record every aspect of product movement, evaluate cross-docking opportunities and manage returns.
|Location||DC Balaraja||DC Cibitung||DC Porong||DC Timika High Land||DC Timika Low Land|
|DC Product Type||Dry Products & Pharmaceuticals||Fresh Products||Dry & Fresh Products||Dry & Fresh Products||Dry & Fresh Products|
|Space (m²)||41,000+ m²||4,500+ m²||21,000+ m²||3,600+ m²||300+ m²|
|Service Area in Indonesia||West & East||West & East||East||Freeport||Freeport|
|Pallet Positions||41,000+ pps||4,000+ pps||29,000+ pps||1,500+ pps||180+ pps|
The Company owns and operates its Information Technology Division. The division has important contribution and achievements for the Company in formulating and developing the management information system at the Company’s retail business. The Company utilizes systems used by global retail companies, such as “RETEK Information System” and “Oracle Finance and Oracle Human Resources Management System.” For its Distribution Centers, the Company utilizes Manhattan Cloud Warehouse Management System program. The Company’s online system utilizes Hypermart Online platform as well as API integration from ride-hailing and marketplace services, in which the Company collaborates for its omni-channel strategy.
In term of data management, the IT Division operates 24/7, with Data Recovery Plan (DRP) in-place to ensure continuity of operations. The data information is presented in formats which enables users to analyse big data and obtain insights for better decision making process. The Company is commited to continue the development of its information technology, in-line with its growth trajectory.