Discretionary remains soft; minimarkets more resilient

4Q25 results recap: Margin surprises led to strong earnings growth

Retailers delivered mediocre same-store sales growth (SSSG) in 4Q25, ranging from low-hih-single-digit negative to low-single-digit positive y-y growth (Fig. 2). The only exceptions were Erajaya (ERAA IJ, Buy) and MAP (MAPI IJ, Buy), whose SSSG was boosted by the iP17 launch off a lower base in 4Q24, following the delayed iP16 launch in Indonesia.

For most retailers, sales growth was primarily driven by store expansion rather than organic growth. Meanwhile, several companies such as Alfamidi (MIDI IJ, Buy), Alfamart (AMRT IJ, Buy), and MAP Active (MAPA IJ, Buy) delivered strong y-y earnings growth, supported by a significant recovery in gross margins (Fig. 3). Alfamidi and Alfamart benefited from reduced direct promotions compared to last year (Resilient amidst challenges,  Recovery underway, growth to follow) while MAPA recorded higher full-price sales during the seasonally strong 4Q25 period.

Opex-to-sales ratiosgenerally increased y-y (Fig. 4), as weak SSSG was insufficient to offset cost inflation, particularly wage increases, with the 2025 minimum wage rising by ~6.5% y-y.

1Q26F oOutlook: SSSG supported by earlier festive season

As the Eid festive season shifts forward by ~10 days each year, the seasonal boost to sales will occur earlier in 1Q26 compared to 1Q25. Based on our discussions with retailers and mall operators, foot traffic before and during the festive period has been positive.

However, concerns remain for 2Q26F–3Q26F, as there are limited spending catalysts, particularly for mid- to upper-income consumers. Indonesian consumers typically concentrate spending during the Eid festive season (1Q) and year-end holidays (4Q), leaving a demand gap in the middle of the year.

We believe Alfamart and Alfamidi should still be able to deliver mid-single-digit y-y SSSG in 1Q26F, supported by the earlier festive season and improved rice supply in modern trade channels, which has helped drive traffic recovery since Dec-25.

Higher inventory days observed across the board

Retailers recorded higher inventory days in 4Q25 (Fig. 5), which was expected given preparations for earlier festive periods, including Chinese New Year and Eid, both falling in 1Q26. Inventory levels at the end of 1Q26 will provide better clarity on potential overstock risks.

At the company level, we believe MAP Active’s elevated gross profit margin in 4Q25 would not be sustainable, given its relatively high level of inventory aged over six months as of 9M25. This suggests the need for additional clearance activity in the coming quarters.

On the other hand, Erajaya could leverage the approximately 10% increase in ASPs for low- to mid-tier smartphones, particularly Chinese brands, driven by higher memory chip prices, to help clear inventory if necessary. For other retailers, we do not anticipate significant inventory-related risks.

Outlook: Discretionary remains soft; minimarkets more resilient

While 1Q26F performance across retailers may be relatively solid, we remain cautious on discretionary SSSG for 2026F, forecasting growth of around 3–5% y-y despite a lower base. We see limited catalysts to drive stronger spending among mid- to upper-income consumers.

We expect slower performance in 2Q26F–3Q26F due to the absence of major holidays. At a 3–5% SSSG level, margin expansion is likely to remain modest.

In contrast, minimarket operators should demonstrate more resilient SSSG, supported by their staple-focused product offerings.

Our sector preference remains: MIDI > AMRT > MDIY > MAPA > ERAA > MAPI > ACES > LPPF > RALS

Fig. 1: Retailers results summary

Ticker	Rating	Mkt Cap (IDRtn)	y-y Sales growth 4Q25 (%)	y-y EBIT growth 4Q25 (%)	y-y Sales growth 12M25 (%)	y-y EBIT growth 12M25 (%)	Sales contribution to cons est (%)	EBIT contribution to cons est (%)	Nomura expectations	Implied FY26F P/E (x)	P/E stdev to 5-year mean
ACES	Buy	6.5	-2.1%	-49.1%	0.7%	-38.9%	98.4%	73.3%	Below	8.4	-1.1 SD
AMRT	Buy	59.0	7.5%	65.7%	7.2%	10.9%	99.1%	107.4%	In-line	15.6	-1.5 SD
ERAA	Buy	6.1	45.4%	42.6%	17.4%	1.5%	108.1%	96.0%	Above	4.3	-2.0 SD
LPPF	Reduce	4.1	-8.3%	-31.3%	-9.6%	-20.9%	97.4%	92.7%	Below	5.0	-0.8 SD
MAPA	Buy	18.7	12.0%	45.9%	12.2%	17.6%	99.1%	108.0%	Above	9.9	-0.4 SD
MAPI	Buy	20.3	27.7%	41.7%	13.9%	15.6%	104.8%	108.7%	Above	9.0	-0.6 SD
MDIY	Buy	20.2	15.1%	3.4%	16.7%	4.4%	99.7%	98.7%	In-line	14.3	-0.1 SD
MIDI	Buy	10.3	3.2%	130.5%	3.8%	42.2%	98.2%	100.5%	Above	12.3	-2.1 SD
RALS	Reduce	3.2	-24.6%	69.4%	-14.3%	-58.4%	92.1%	43.4%	Below	10.1	-0.5 SD

Fig. 2: Retailers 4Q25 y-y SSSG – excl. iPhone-related, SSSG was weak

Fig. 3: Retailers 4Q25 y-y GPM changes (bps) – More full price sales (MAPA) and direct promotion cut (AMRT and MIDI) push GPM higher

Fig. 4: Retailers FY25 y-y opex-to-sales changes (bp) – Excl. MAPI (higher iP mix) and MIDI (Lawson divestment), Retailers saw opex-to-sales increase y-y

Fig. 5: Retailers 1Q25-4Q25 inventory days trend

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Jody Wijaya (jody.wijaya@verdhana.id)

Sandy Ham (sandy.ham@verdhana.id)

Nayla Yasmin (nayla.yasmin@verdhana.id)

Samuel Christian (samuel.christian@verdhana.id)