In the fast-changing landscape of modern retail, traditional hypermarkets are facing increasing pressure to stay relevant. According to the Indonesian Shopping Center Management Association (APPBI), the hypermarket business model is becoming increasingly strained in 2025, largely due to shifts in consumer behavior, digital disruption, and rising operational costs.
In this SEO-optimized article, we’ll explore why hypermarkets are struggling, what APPBI has revealed about their current condition, and what the future may hold for this once-dominant retail format.
Hypermarkets Losing Ground in the Retail Race
Hypermarkets, once the go-to destination for bulk shopping and affordable pricing, are now seeing a significant decline in foot traffic and sales. APPBI reports that consumer preferences are shifting rapidly, with many Indonesians now favoring convenience stores, e-commerce platforms, and smaller format supermarkets over sprawling hypermarket chains.
Moreover, urbanization and lifestyle changes have made large-scale shopping less attractive, especially in metropolitan areas where time efficiency is critical. Instead of visiting a hypermarket for weekly shopping, many consumers now opt for on-demand grocery apps or nearby minimarkets.
Digital Disruption Accelerates the Decline
Another major factor behind the decline, according to APPBI, is the rapid growth of digital commerce. Online marketplaces and e-grocery services have made it easier than ever to shop without stepping foot into a physical store. This convenience has significantly hurt hypermarkets, which traditionally rely on large footfall and in-person purchases to drive profits.
In addition, the rise of promotional campaigns on e-commerce platforms, such as flash sales and free delivery offers, has made it difficult for hypermarkets to compete on price and accessibility. With younger generations increasingly turning to digital solutions, the relevance of traditional hypermarket formats continues to erode.
Rising Costs, Shrinking Margins
Furthermore, APPBI also highlighted that operational expenses are climbing rapidly, further squeezing profit margins for hypermarket operators. Costs related to staffing, energy, logistics, and rental space are increasing, while sales volumes remain stagnant or declining.
This double squeeze—higher expenses and lower revenue—has led several hypermarket chains in Indonesia to shut down unprofitable locations or rethink their expansion strategies altogether.
Some major brands are now pivoting toward smaller store formats or merging digital capabilities into their physical operations to survive. However, these transitions require capital investment, which can be challenging amid tight cash flow.
What’s Next for Hypermarkets in Indonesia?
Looking ahead, APPBI believes that hypermarkets must undergo a major transformation to remain competitive. Embracing omnichannel strategies, optimizing supply chains, and offering personalized shopping experiences are just a few ways retailers can adapt.
Still, the road ahead won’t be easy. As competition from e-commerce intensifies and consumer habits continue to evolve, only the most agile and forward-thinking hypermarket operators are likely to survive.
Conclusion: Adapt or Exit the Market
In summary, APPBI’s warning about the hypermarket sector serves as a wake-up call for traditional retailers. Without rapid innovation and digital adaptation, hypermarkets may continue to lose relevance in Indonesia’s dynamic retail environment.
