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2017 is expected to be challenging as the weaker pound is putting upward pressure on prices and growing uncertainty could affect consumer spending.

The 2017 retail sales outlook remains positive, due to robust private consumption driven by an improved housing market, job growth and higher wages.

Sales are expected to grow further in 2017, but smaller businesses are struggling to cope with the fast growing market leaders and online retailers.

Given the positive economic outlook for 2017 with household consumption forecast to increase above 3% , robust consumer durables sales growth is expected.

In 2016 non-food retail sales increased 6.8%, benefitting from robust private consumption growth fuelled by low inflation and increasing employment.

Small- and medium-sized retailers generally operate on low margins and are impacted by multiple sourcing agreements, competition and price volatility.

Indonesia's retail sector remains one of the most promising in Asia due to the large population and growing middle class with higher purchasing power.

Weaker players have disappeared while other businesses chose to merge with other peers in order to survive, and the concentration process will continue.

Payments in the sector range from 60 to 90 days; however, they can extend to more than 120 days depending on the market power of individual retailers.

The risk of a downturn in the domestic real estate market could dampen higher growth prospects in the furniture and domestic appliances segments in 2017.