Retail

Channel Check: Promotional Activity Remains Elevated Post-Eid

• Most retailers continued their promos post-Eid season in Apr-May26; MAPA & MAPI rotated weekly offers, while AZKO continues with its various campaigns.
• Staple retailer demand remains relatively resilient, led by continued SSSG improvement in MIDI.
• Maintain Overweight on the sector; MIDI (Buy, TP Rp500) as our top pick.  

Variety of promotional activities post Eid to boost sales

Our weekly channel checks indicate that most retailers sustained promotional activity in Apr-May26, following the Eid season. MAPA launched its Mid-Season Sale (up to 50% off) in April, followed by the End-of-Season Sale in early June, while also running various mono-brand promotions (e.g., Buy 2 Get 1, cash rebates, and BOGO offers). MAPI offered fewer promotions than in 1Q26, with Marks & Spencer running a limited-time 50% discount and Inditex brands maintaining 50-70% markdowns as part of their inventory clearance efforts, alongside double-date sales events. AZKO continued promoting its private-label products, particularly Stora, through various campaigns and routine online/payday promotions, before launching its annual Boom Deals in early June.

Staple retailers continue to demonstrate resilience

While we acknowledge concerns over softer demand post Eid festive season, we have seen continued signs of recovery in the SSSG of MIDI as a staple retailer. Despite a lower base effect last year, MIDI delivered Apr25 SSSG of +1.1% yoy (vs. Apr24 of –14.8%) with growth accelerating further to +7.15% in May26. Meanwhile, ACES reported a softer Apr26 SSSG of +2.4% due to the timing shift in Eid, yet still within the 2-4% management’s guidance. Nevertheless, we view weaker IDR and heightened macro uncertainty as key headwinds to purchasing power, which could weigh on discretionary spending.

Fund flows and positioning

Within retail space, domestic funds have modestly increased their exposure over the past month, particularly in MAPI and MAPA. We believe this was primarily driven by improving investor sentiment as MAPI traded closer to their MTO price at Rp1,550/share. Meanwhile, positioning in ACES and MIDI has remained largely unchanged over the past 3 months. From a foreign flow perspective, ACES has seen the largest reduction in positioning ytd, while they have added selectively to MIDI and maintaining broadly stable positions in both MAPI and MAPA.

Maintain MIDI as our top picks

We maintain our Overweight rating on the sector; the sector valuation has continued to derate to 10.1x FY26F PE, which stood at -1.5std of its 3yr mean. We think the current valuation already reflects most of the prevailing macro and consumption concerns. We reiterate MIDI (Buy, TP Rp500) as our top picks in the sector. We remain constructive on its defensive, staple-focused business model, which provides greater earnings visibility amid softer consumption backdrop, more resilient growth outlook and potential for margin expansion. Currently, MIDI trades at an undemanding 11.0x PE FY26F.

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