Impact of Supermarkets on Traditional Markets and Retailers in Indonesia's Urban Centers

Daniel Suryadarma, Adri Poesoro, Sri Budiyati, Akhmadi , Meuthia Rosfadhila
Economic Policy
Research Report, August, 2007, Final


Research Team:
Daniel Suryadarma, Adri Poesoro, Sri Budiyati, Akhmadi, Meuthia Rosfadhila

Field Researchers:
Luluk Kholisoh Nurona, Novianti, Tri Rini Puji Lestari, Dudi Lesmana, Swasti Putri Mahatmi, Anggie Pradita, Hendra Wahyu Wardhana, Lola Angelia, Agita Nurfianti, Chitra Permata Dewi, Heru Pramudhia Wardhana, Yanuar Tryadi Fembriarta

Sudarno Sumarto, Asep Suryahadi, Neil McCulloch

Kate Weatherley


This study measures the impact of supermarkets on traditional markets in urban centers in Indonesia quantitatively using difference-in-difference and econometric methods as well as qualitatively using in-depth interviews. The quantitative methods find no statistically significant impact on earnings and profit but a statistically significant impact of supermarkets on the number of employees in traditional markets. The qualitative findings suggest that the decline in traditional markets is mostly caused by internal problems from which supermarkets benefit. Therefore, ensuring the sustainability of traditional markets would require an overhaul of the traditional market management system, enabling them to compete with and survive alongside supermarkets.

Keywords: impact evaluation, traditional market, supermarket, urban, Indonesia

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