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Abstract

In Indonesia’s urban centres, supermarkets have multiplied recently. With cheaper higher-quality commodities and better services, supermarkets have the potential to drive traders in traditional markets out of business. This paper evaluates whether that is happening. It finds that traditional traders experienced declines in their business. However, both qualitative and quantitative findings indicate that the main cause of decline is not supermarkets. Instead, traditional markets are plagued with internal problems and face increasingly bitter competition from street vendors. The paper recommends policy to strengthen traditional traders and tackle the problem of street vendors.

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