ABSTRACT
Introduction One of the most prominent features of Indonesia’s retail industry is that it has been growing as a battlefield between two main policies: protecting small to medium enterprises (SMEs) and opening the market in the interest of efficiency. In the 16 years following the economic crisis in 1997, the growth of the industry was accelerated by a combination of large population, economic recovery, globalization and opening up of the market. The picture of Indonesian retail history started to change with the introduction of modern retail in the 1960s, when modern shops were established in big cities (Visidata Riset Indonesia 2003: 1). This marked the first part of retail development that included both traditional and modern retail in the country. The second part was marked in 1998 by the opening up of retail industry for foreign investors with a letter of intent signed by the Republic of Indonesia Government to the International Monetary Fund (IMF) on 15 January 1998, legitimised afterwards with Presidential Decree No. 99/1998 and the Decision Letter of the State Minister of Investment (Head of Capital Investment Coordinating Board) No. 29/ SK/1998.
