Retail sales are expected to strengthen by the end of the year and the first quarter of 2026. One of the driving factors is the big momentum, namely the year-end holidays and the fasting month of Ramadan.

This is stated in the September 2025 Sales Expectation Index (IEP) released by Bank Indonesia (BI), which explains that sales in the next three months, namely December 2025 and the next six months, namely March 2026, are expected to increase.

The December 2025 IEP position was recorded at a level of 167.7 higher than November which amounted to 146.8. Meanwhile, the March 2026 IEP position was recorded at a level of 155.7 lower than February 2026 which was at a level of 142.3.

This indicates retailers' confidence that consumer demand will be maintained until the end of the year. "Respondents expect sales to remain positive in October 2025," BI wrote in its report.

Meanwhile, retail goods price expectations showed a potential increase, from 157.2 for the next three months to 172.5 for the next six months. This increase reflects anticipation of rising costs and price pressures at the retail level.

By item group, annual sales growth in September 2025 was highest for food, beverages, and tobacco, which rose 6.4%. Vehicle parts and accessories also increased 11.4%, while motor vehicle fuel rose 5.4%. In contrast, sales of clothing fell 8.2% and communication equipment dropped a sharp 33.6%.

In terms of regions, the annual increase in retail sales mainly occurred in Surabaya with an increase of 19.1%, followed by Banjarmasin 13.7% and Semarang and Purwokerto 8.3% each. Several other major cities recorded declines, such as Jakarta down 16.9%, Bandung 11.1%, and Manado 19.0%. Overall, BI assesses that retail sales are still growing positively in most regions, with projections to remain expansive until the end of the year.

The natural thing

Center of Reform on Economics (CORE) economic researcher Yusuf Rendy Manilet assessed that the decline in monthly retail sales in September 2025 was not a sign of weakening purchasing power, but a seasonal effect. According to him, in the third quarter there was no special momentum that encouraged an increase in public consumption, so it was natural that there was a decline.

"The annual figure is actually more illustrative of the real sales conditions this year compared to last year. As long as the numbers are still positive, it is a better mirror to see changes in growth," he said.

According to Yusuf, sales expectations for the next three months are rising, driven by economic activity in the fourth quarter. Towards the end of the year, household consumption usually strengthens as domestic and export demand increases. "There is the moment of Christmas and New Year," he said. In addition, government spending, which tends to rise at the end of the year, also strengthens people's purchasing power.

For the next six months, Yusuf estimates that the upward trend will continue with the entry of the Ramadan and Eid periods in February to March 2026. The religious momentum, he said, will drive a surge in consumption in the first quarter of next year. The combination of increased domestic demand, government spending, and seasonal factors makes the sales outlook remain positive until early 2026.

However, Yusuf reminded that the expected increase in retail prices from 157.2 to 172.5 also indicates the potential for inflationary pressures over the next three to six months. He assessed that an increase in sales is usually followed by an increase in the prices of consumer goods, especially strategic foods such as rice, chili, and eggs. So, the government, he said, needs to anticipate the risk by maintaining supply stability and ensuring the distribution of goods runs smoothly.

"If real sales increase, inflation expectations usually go up. What needs to be anticipated is when the increase in inflation expectations from real and retail sales coincides with expectations of rising food prices. The impetus is double from retail sales and from food," Yusuf said.

Yusuf added that variations in sales performance between regions can be the basis for the government to determine a more targeted price control policy. Data from BI shows that sales are still growing in Surabaya, Banjarmasin, and Semarang, but declined sharply in Jakarta, Medan, and Manado. Regions with high price pressure need to receive more attention, for example through market operations and strengthening logistics, so that price stability is maintained towards the beginning of next year. 

Determinant

In line with Yusuf's analysis, chairman of the Indonesian Shopping Center Entrepreneurs Association (APPBI) Alphonzus Widjaja believes that the decline in sales in September 2025 is part of a normal seasonal pattern. The third quarter period is usually the low season after the end of Ramadan and school holidays. "So it's normal that sales decline on a monthly basis," he said.

According to him, the retail sales cycle in Indonesia always peaks at two main periods, namely Ramadan and Eid al-Fitr and Christmas and New Year. Increased consumption will continue to occur from the end of the year until the first quarter of 2026 due to the series of holidays that are close together. "The firstpeak season is Ramadan and Eid, while the second is Christmas and New Year," he said.

Regarding the difference in sales performance in various cities, Alphonzus believes that this is influenced by the diverse economic structure and purchasing power of the community. Regions outside Java are relatively more stable because they depend on the natural resource sector, while sales in Java are more volatile because they depend heavily on the manufacturing industry. "So relatively outside Java is more stable in terms of purchasing power," he said.

To take advantage of the year-end momentum, Alphonzus said retailers are preparing a number of strategies to keep people shopping. "It is necessary to hold various events or events so that people come to the shopping center, then shopping programs such as discounts to encourage them to make transactions," he said. The fourth quarter of 2025 will be the last chance for the retail industry to maximize sales before the year changes.

Furthermore, Alphonzus assessed that two major momentum, the fourth quarter of 2025 and the first quarter of 2026, will determine the direction of growth of the national retail industry. These two periods are crucial times to close the current year's achievements while opening up sales prospects in the following year.

"Q4 2025 is very important so that this year's growth target can be maintained, because it is the last chance before closing the year. Meanwhile, Q1 2026 will be the peak of retail sales in 2026, and if the peak is not reached, it will affect sales performance throughout the year. This is because the trend is always like that. After Q1 will enter the low season. So these two quarters really have to be maximized," he said.