INDonesia

April 27th, 2021: The possible effect of government food staple assistance on the corner shop sales

The Government of Indonesia has been distributing some social assistance, including food staple, and allocated around IDR 43.6 trillion (~USD 3.2 billion) for beneficiaries to relieve the impact of COVID-19[1].

In Temanggung, Central Java, the low-income households have started receiving food staple assistance since May 2020[2]. Each household received food staples worth IDR 200,000 (~USD 13.85) which consisted of rice, eggs, cooking oil, instant noodles, and sardines. While the assistance was a well-meaning intervention to ease the burden of the impacted households, it turned out that some corner shop owners saw a decline in revenue from their food staples sales. Some diarists who live in Temanggung shared that their food staple sales kept decreasing, assuming that one of the factors was food staples distribution from the government.

“Since the government distributed food staple assistance for more people—including those in my area—during the COVID-19 pandemic, I see that my food staple sales have reduced.” said Fatimah during our discussion in April 2021. 

The data above reflects that Fatimah’s revenue on food staples has decreased since October 2020, the time when more people started receiving food staple assistance. 

Rima and Aisyah also shared similar concerns as Fatimah. During our discussion in April 2021, Aisyah further added that food staple assistance distribution had affected her sales, causing her four-barrel-stock of rice left unsold.

While they understand the importance of social assistance to the low-income community, the diarists hope that the government can also engage with the local corner shops in distributing the food staple assistance in the future. For instance, the government can involve the local corner shops as their distribution agents and give them incentives. Otherwise, the corner shops can also sell their goods with lower price while receiving subsidy from the government.

April 2nd, 2021: The diarists who own service-oriented corner shops are struggling to bounce back from the COVID-19 shock

It has been a year since the pandemic hit the lives of the corner shop diarists. Most corner shops—especially those who sell groceries—have bounced back to normal. For instance, right after the pandemic hit, Hening’s revenue ranged within IDR 30 million (~USD 2,079). But since November 2020, her revenue started to increase to IDR 33 million (~USD 2,285) per month. Meanwhile for Fatimah, her revenue ranged around IDR 2 million (~USD 138) in the beginning of the pandemic. Since November 2020, she received about IDR 8 million (~USD 554) to IDR 11 million (~USD 761) per month.  However, for diarists whose businesses offer services, better days are quite far ahead since their customers have less income due to the pandemic. 

Yanti owns a beauty parlor in Wonosobo. Before the pandemic, she had around 50 customers per day. But the customer footfall fell—even to zero—during the week of large-scale social restriction. As a result, her revenue dropped significantly from IDR 45 million to IDR 21 million per month. She also had to reduce her workforce from five to only three people. 

Meanwhile, Edi, who owns a mechanic workshop, also reported a significant drop in revenue. The majority of his clients were tobacco farmers whose income was affected by the tobacco price drop during the pandemic. Besides, the ojek drivers of Prau Mountain tourist area who visited his place for motorbike service, came to his shop less regularly since there were no tourists coming. Furthermore, the increase of the spare part market price by 20% pushed Edi to lower the spare part selling price by 50% to make it more affordable.

However, the situation has slowly returned to normal. During our conversation, Yanti mentioned that her customers slowly started to come again, although it was quite scant compared to the time before the pandemic. Meanwhile, as suggested by the chart above, Edi has gradually recovered his revenue after December 2020. More farmers have come to fix their motorbikes at Edi’s place during the beginning of the planting season in January 2021. Edi also observed that more people visited Prau Mountain since January 2021. This was likely due to the decreasing number of COVID-19 cases and the start of vaccination programs. As tourists started coming, more ojek drivers returned to the operation and often used Edi’s service.

We observe that groceries shops tend to get their businesses back as there were no longer strict social restrictions, allowing people to go outside and get the basic necessities, such as food and amenities. Fatimah, one of our diarists who sells groceries, also said that people started coming to buy the basic necessities from corner shops. That is unlike the early pandemic where people were more inclined to buy groceries in bulk in the traditional market.  

Meanwhile, as people in Wonosobo were trying to survive from the pandemic and fulfil daily necessities, spending money in beauty salon or mechanic was considered as secondary needs and therefore not prioritized. The service-oriented corner shops still need more time until customers have more budget to use their services.

[1] MSC, Impact of the COVID-19 pandemic on Program Keluarga Harapan (PKH) beneficiaries and program implementation, https://www.microsave.net/wp-content/uploads/2021/03/Impact-of-the-COVID-19-pandemic-on-Program-Keluarga-Harapan-PKH.pdf [2] Temanggung Regency, Pemkab Temanggung mulai salurkan sejumlah bantuan sosial “The government of Temanggung Regency started to distribute social assistance”, https://jatengprov.go.id/beritadaerah/pemkab-temanggung-mulai-salurkan-sejumlah-bantuan-sosial/

Last Updated: May 3, 2021