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i COMPARATIVE ANALYSIS OF MODERN RETAIL BUSINESS COMPETITION SYSTEMS: REVIEW OF SHARIA ECONOMIC LAW (STUDY AT SURYA MART SUPERVISOR AND INDOMARET FRESH PONOROGO, EAST JAVA) THESIS Muhamad Cholik Yuswara Azmi NIM. 41.2020.321082 THE LAW OF ISLAMIC ECONOMIC DEPARTEMENT SHARIA FACULTY UNIVERSITY OF DARUSSALAM GONTOR 1444/ 2023

ii ABSTRACT COMPARATIVE ANALYSIS OF MODERN RETAIL BUSINESS COMPETITION SYSTEMS: REVIEW OF SHARIA ECONOMIC LAW (STUDY AT SURYA MART SUPERVISOR AND INDOMARET FRESH PONOROGO, EAST JAVA) Muhamad Cholik Yuswara Azmi 41. 2020. 321082 Retail business is a practice of selling goods and services carried out by a company in retail or association such as kiosks, department stores and others. Also uses Delivery Service system sales activities, which are generally widely used by consumers and buyers. Therefore, in this research, researchers want to know how the business competition between Surya Mart and Indomaret Fresh Ponorogo compares. As well as an overview provided in the view of Sharia Economic Law. In conducting this research, researchers used descriptive qualitative techniques with field research. In the research process, researchers use research using interview, observation and documentation methods. The results of this research show that the Indomaret Fresh Ponorogo and Surya Mart approaches to business competition highlight strategic differences in terms of emphasizing halal values and principles in product marketing. Indomaret Fresh Ponorogo emphasizes coordination between branches regarding halal products, focusing on various promotions both online and offline, while emphasizing price transparency to build consumer trust. On the other hand, Surya Mart emphasizes its commitment to Islamic values by rejecting products that are deemed to conflict with these values, emphasizing honesty and competitive prices, and emphasizing fairness in pricing based on sharia values. Although their approaches are different, both aim to build consumer trust in accordance with the company values they set. Keywords:Business Competition, Indomaret Retail, Surya Mart Retail, Review of Sharia Economic Law.

1 BAB I INTRODUCTION 1.1 Background The need for shopping is now no longer just a practice activity of buying and selling the goods you need, but also to find a pleasant atmosphere.1With so many influences on improving the economy and lifestyle in society, especially the upper middle class wants more comfort in shopping. Apart from that, the increasing purchasing power of people's interest will also result in a large increase in population, and there will also be changes in shopping patterns that occur in society, especially in urban areas themselves.2 Retail business is a practice of selling goods and services carried out by a company in retail or association such as kiosks, department stores and others. Also uses Delivery Service system sales activities, which are generally widely used by consumers and buyers.3 In Indonesia, the retail business is divided into 2 large parts, namely modern and traditional retail. Modern retail basically started from the development of traditional retail.4This format emerged because of the demands of consumer needs and also in line with developments in the economy, technology and life style, which demand more convenience for people in shopping. These two retailers are very influential in realizing all the needs and benefits of society and of course by realizing the ideals of both, they can run in balance and on an equal footing. However, along with the increase and progress of the global economy, the pace of modern retail is increasing more rapidly in Indonesia compared to the development of traditional retail.5 1 Khoirun Nisa, "Analysis of Islamic Retail Business Strategy Facing the Rapid Growth of Franchise Minimarkets (Business Competition Study in Gribig Kudus)," Thesis, Kudus Islamic College of Religion, Sharia and Islamic Economics, 2015, 80. 2 "The History of Modern Retail in Indonesia: From its Emergence to Its Existence in Society"https://www.kompasiana.com/budhiman/5f90e596de3439683f768cd2/histori-Retailmodern-di-indonesia-dari-kemunculan-untuk-existence-in-society, Accessed May 25, 2021, at 08:51 3 Maria L Pandin, "Portrait of Retail Business in Indonesia: Modern Market," Nuclear Instruments and Methods 164, no. 2 (2009): 255–65. 4 Indonesian Retail Entrepreneurs Association,www.aprindo.org 5Malano, Herman. “Save traditional markets”l. PT Gramedia Pustaka Utama, 2013) p,76

2 These two retail developments, of course, are not left behind with different innovation ideas, especially with loyal consumers and so what can be used is to utilize technology as an innovation in the modern retail business with the ability to analyze and understand consumer behavior. Not only that, in the field of store operations, the technology used must be integrated with the needs of consumer behavior so that this can be shown to make the operations of the modern retail business more efficient.6 In retail business competition, it can be seen from various sides and dimensions. This competition can be seen between modern and traditional retailers or even competition between modern retailers.7Among the types of competition that attract the most attention are traditional retail and modern retail for the reason that it places one party in a weak position. However, what the author focuses on are the problems that exist among modern retailers in Indonesia, especially Indomaret Retail and Surya Mart. Modern retail Surya Mart and so on, is also a very popular shopping place among the people, especially in the South Tangerang area. Because considering that it is not far from home, it also sells many goods that people need, so it provides many great benefits for customers. It is also a city that has the potential and attraction for investors to invest their capital, including in the role and performance of modern retail. However, the competition between these two modern retailers often triggers certain questions. The problem is that there is too much difference in terms of capital and management between the two retailers. Thus, the development and competitiveness as well as consumer interest in both modern retailers are less than optimal and this often leads to loss of competitiveness or even bankruptcy. However, not everything is bad 6 Johan Oscar Ong, Achmad H. Sutawijaya, and Ahmad Badawi Saluy, "Modern Retail Business Innovation Strategy in the Industrial Era 4.0," Scientific Journal of Business Management 6, no. 2 (2020): 201–7. 7 Minarsih, MM "Small Warung Traders in the Onslaught of Modern Retail. Dynamics of Science, 11(26).Department Lecturer, Management, Faculty of Economics, (2019). h. 86.

3 news for many traditions that have been able to compete and survive in the face of strong retail business competition.8 Among other indicators of competition problems, the two modern retailers can be compared in terms of daily profit turnover. Looking at the data, the author finds that the daily profit or turnover of goods sales at Indomaret Retail is around 7-10 million.9Meanwhile, the sales turnover of Surya Mart, which was conveyed by Hambali Noersaad in the online Surya Mart group, reports daily sales turnover around 3.4 - 4.2 million.10Looking at the two retail turnover reports above, it can certainly be concluded that there is a serious competition system that has different roles and methods so that it can be superior to other retail businesses. Another problem is that many Muslims are competing to shop at Modern Retail businesses. For this reason, it is easy to reach because its presence is spread and close to almost every region.11Meanwhile, there are still many modern retail businesses which of course do not yet implement a system of ethics or sharia trading principles.12Apart from that, there are several facts which state that carrying out trading practices has a negative impact on other businesses. This was conveyed by the Business Competition Supervisory Commission, also stating that in the development of a business, especially the Indomaret Retail business, a decision had been given by the Unfair Business Competition Supervisory Commission Number: 03/KPPU-LI/2000 with a lack of attention to the existence of an appropriate balance principle. economic 8 Muhamad Farhan Maulana, Leny Muniroh, and Azolla Degita Azis, "The Influence of Modern Retail Prices and Promotions on Traditional Retail Revenues" Journal of Management Science, Ibn Khaldun University Bogor, no. 5 (2022): p. 2. 9 Aryan. W, "Indomaret Franchise Benefit and How to Calculate It" https://keuntungan.net/keuntungan-waralaba-indomaret/ Accessed 30 January 2020. 10 Doni Osmon, "Surya Mart Publish Daily Turnover, Financial Transparency" https://tabloidmatahati.com/surya-mart-publish-omzet-harian-transparan-finansial-cepat-bukabesar/#.ZFUFB3ZBzb0 Accessed April 14 2020. 11 Evi Damayanti, "Review of Islamic Law on the Existence of Alfamart and Indomaret Minimarkets in Indonesia," Journal of Islamic Business Law, Vol 11, no. 02 (2019): p. 224. 12 Muhammad Musa, Reza Maulana, "Factors Affecting Community's Interest To Shopping At 212 Mart", Journal of Sharia Business Economics and Banking, no. 1, 5, (2021): p. 36.

4 democracy in creating healthy competition between the interests of business actors and the public interest.13 From the statement above, the difference between Sharia Modern Retail and Modern Retail in general is only the source of capital taken and of course not selling goods that are prohibited by Islam. Therefore, researchers want to compare the two Indomaret Modern Retail and Surya Mart Modern Retail both in terms of business competition and price setting systems. Because, both retailers have similarities in that they operate in the retail sector with the aim of selling people's daily needs and also to meet people's daily needs. By referring to the description of the phenomenon, empirical data, issues that have been explained, and the theories that have been explained, further research needs to be carried out regarding the comparison of business competition between Surya Mart and Indomaret Fresh Ponorogo. As well as an overview provided in the view of Sharia Economic Law. This is where researchers will conduct research which is outlined under the title "Comparative Analysis of Modern Retail Business Competition Systems: Review of Sharia Economic Law (Study at Surya Mart and Indomaret Fresh Supermarkets, Ponorogo, East Java)". 1.2 Formulation of the problem Based on what is explained in the background, the problem formulation in this research is as follows: 1.2.1. How does the business competition and pricing system compare in the Indomaret Modern Retail and Surya Mart Supermarkets in Ponorogo? 1.2.2. What is the review of Sharia Economic Law in the Business Competition system for Indomaret Modern Retail and Surya Mart Supermarkets in Ponorogo? 13 Evi Damayanti, "Review of Islamic Law on the Existence of Alfamart and Indomaret Minimarkets in Indonesia", Thesis, Faculty of Sharia and Law, Sunan Kalijaga State University, (2018): p. 8.

5 1.3 Research Objectives Based on the problem formulation above, there are several specific objectives to be achieved in the research, including: 1.3.1. Examine and describe the comparison of Business Competition systems in the Indomaret Modern Retail and Surya Mart Supermarkets in Tangerang. 1.3.2. Examining and describing the review of Sharia Economic Law in the Business Competition system for Indomaret Modern Retail and Surya Mart Supermarkets in Tangerang. 1.4 Research Uses This research was conducted to provide benefits for the parties researched and for the author himself, both theoretically and practically. 1.4.1. Theoretically. Adding insight and knowledge to the writer and at the same time as carrying out academic tasks to complete one of the requirements for obtaining a Bachelor of Laws degree at the Faculty of Sharia, Darussalam Gontor University. Other theoretical benefits are also expected to provide benefits in implementing perfect, effective competition and the absence of elements of free competition in the modern retail business Indomaret and Swalayan Surya Mart in South Tangerang and also other retailers. Also how important the role of entrepreneurs is in realizing economic growth. This theory is aimed at entrepreneurs who are a group that will continue to make innovations and updates in economic activities. 1.4.2. Practically It is hoped that this research can become study material or further research material and can add information related to the development of Modern Retail in Indonesia, especially in South Tangerang. This research is also an implementation of the Tri Darma of higher education, where it is hoped that the results of this research can

6 make a positive contribution to the world of science in the field of Sharia Economic Law, Darussalam Gontor University. Also for business actors, both sellers and buyers, this research is expected to provide information from various other information and can be used as reference material or literature review to add information for further research or other research related to business competition systems and price determination for modern retail businesses. Indomaret and Swalayan Surya Mart in a review of Sharia Economic Law itself. 1.5 Literature review 1.5.1 Previous Research From the results of studies conducted by researchers in several scientific papers, discussions about retail businesses are nothing new. Many previous researchers have conducted research on modern retail businesses, but have different titles. This research has been published in Scientific Works including: NO Research Title Research result Research GAP 1 Business Competition from the Perspective of Conventional Economic Law and Sharia Economics. Results from researchers at the Mohamad Tedy Journal in 2018 concluded that conventional economic law and sharia economic law have several similarities and differences in concept. If we look at the discourse tendencies that are developing among Muslim intellectuals, in market mechanisms, the concept of sharia economics This research focuses on discussing comparative studies of the principles of business competition in the conventional economy and sharia economy as well as looking at trends that occur in global competition both from market studies in the sharia economy and

7 approaches the concept of the role of reason approach, which emphasizes market freedom. Meanwhile, if we look at market structure, the sharia economic concept places more emphasis on a per se illegal approach because of the need for full government involvement in monitoring the market. conventional economics. Meanwhile, the differences that the author examines focus more on a comparative study of business competition that occurs in modern retail as well as a review of Sharia Economic Law. 2 Unfair Business Competition in Indonesia According to Islamic Economic Law and Law Number 5 of 1999 concerning Prohibition of Monopolies and Unfair Business Competition The results of journal researchers Maya Meilia and Daranisa Anisa in 2019 concluded that business competition according to Islamic economic law is permitted competition, as long as the business competition is carried out in a healthy manner, but if the business competition carried out is monopolistic in order to take advantage, then economic Islam prohibits it. This is because Islamic economics provides the line that business competition must be conducted in a fair play manner with the principles of honesty, openness and fairness. This research focuses on discussing unhealthy business competition in Indonesia both in terms of Islamic economic law and written laws, one of which is Law Number 5 of 1999 concerning the prohibition of unfair business competition. Meanwhile, the differences that the author examines focus more on business competition which is reviewed in Sharia Economic Law only, not according to the law on business competition.

8 3 Analysis of Competition in Traditional Markets and Modern Markets in the Perspective of Islamic Business Ethics (Case Study on Comparison Between Peunayong Traditional Market and Suzuya Mall The results of researcher Della Geubrina Murni Thesis in 2019 concluded that the form of competition between the two retailers was classified as competitive. In terms of products, Peunayong Market looks more varied and has different product sources. Meanwhile, at Suzuya Mall, the products look more attractive in terms of their packaging. In terms of location, the choice of location and environment are both considered strategic. However, in terms of price, there are differences because Suzuya Mall has a packaging process, machine cooling and product pricing so that prices are relatively cheap at Peunayong Market. This research focuses on discussing the analysis of the forms of competition in the modern Suzuya Mall market and the Peunayong traditional market and examines the review in Islamic Business Ethics of these two forms of competition. Meanwhile, the differences that the author examines focus on analyzing modern business competition with modern retail and reviewing its review in Sharia Economic Law. 4 Analysis of the Influence of Price and Service Quality on Consumer The results of researcher Arif Ferdian Agung's thesis in 2018 concluded that the price variable (X1) at This research focuses on discussing the analysis of the influence of price and

9 Satisfaction from an Islamic Economic Perspective (Comparative Study of Indomaret and Surya Supermarket Line 2 Korpri Consumers) Swalayan Surya obtained a significance value of 0.392. This means that 0.392 > 0.05 so it can be concluded that price does not have a positive and significant effect on Surya consumer satisfaction. Meanwhile, in the Indomaret Supermarket, the price variable (X1) obtained a significance value of 0.353. This means that 0.679 > 0.05 so it can be concluded that price does not have a positive and significant effect on Indomaret consumer satisfaction. If viewed from an Islamic Economics perspective, the prices set by Swalayan Surya are in accordance with the Islamic economic concept, namely the principle of justice. Consent from both parties/willingness and no coercion and no harm from either party (dzolim). Meanwhile, Indomaret supermarkets in setting prices are not in accordance with Islamic economic service quality on consumer satisfaction at Swalayan Surya Mart and Indomaret as well as Islamic economic views on price and service quality at Indomaret and Surya Mart. Meanwhile, the differences that the author examines focus on comparative analysis of business competition and pricing of modern retailers Indomaret and Surya Mart as well as their review in Sharia Economic Law.

10 concepts. 5 Analysis of Commodity Sales Strategy at Surya Gondang Supermarket from Sharia Economic Law Perspective Results from Trivita Octaviana Journal researchers, M. Mahdil Mawahib, Abdullah Taufik in 2019 concluded that the first strategy implemented by Supermarket Surya Gondang was to attract consumer interest by implementing several programs, including promotions on certain commodity goods. Promos that occur at Swalayan Surya Gondang include Discount Promos, Cheap Promos, Exciting Promos, Beauty Fair Promos, Baby & Kids Fair Promos, Kitchen Fair Promos, End of Month Promos, Early Month Promos, 3 Days Only Promos. and Home Care Promotion. The second strategy carried out by the supermarket, namely setting prices at the Surya Gondang Supermarket, can be interpreted as a price agreement between the This research focuses on discussing the analysis of sales strategies for commodity goods at the Surya Gondang Supermarket and its views from the perspective of Sharia Economic Law. Meanwhile, the differences that the author examines focus on analyzing modern business competition with modern retail and reviewing its review in Sharia Economic Law.

11 supermarket and the consumer (customer) in carrying out sales transactions. The price determination that occurs at Swalayan Surya Gondang is a direct price given from Swalayan Surya Distributor. The price set is a benchmark for other Surya Swalayan branches to be able to market commodity goods. Pricing at the Surya Gondang Supermarket can be said to be in the form of POP (Point Of Price) which is stated on the commodity goods label. 1.5.2 Conceptual Foundations a. Business competition The theory of competition and business is quite broad and diverse when explained in a comprehensive definition and understanding. In the KBBI the word business is mentioned as a trading business, a commercial business in the world of trade and the business sector.14According to Kotler and Keller, they state that competition in the marketing context is where companies 14 Maya Darania, "Unfair Business Competition in Indonesia According to Islamic Economic Law and Law Number 5 of 1999 concerning Prohibition of Monopolies and Unfair Business Competition," El-Jizya: Journal of Islamic Economics 7, no. 1 (2019): p. 85. https://doi.org/10.24090/ej.v7i1.3446.

12 compete and compete to show their superiority with the aim of reaching their customers.15 In microeconomic theory, competition in a market is divided into two. That is; perfect business competition and imperfect competition. According to Adam Smith in his book The Wealth of Nations, market competition will encourage the allocation of production factors towards the most beneficial and high-value uses. Adam Smith in his theory called the Invisible Hand.16 In Islam, there are no prohibitions on the practice of business competition. Rather, Islam emphasizes that business competition must be healthy, fair and honest and accompanied by strengthening ukhuwah and ties of brotherhood. Islam limits individual freedom to compete by Islamic ethics and morals, and is still regulated in the Aqidah which allows a person to be a reflection in business competition in accordance with Islamic teachings.17Good competition that is carried out well is also for the purpose of ensuring that Allah will be pleased with all the actions of business actors. This principle of healthy business competition is clearly not only adhered to in the conventional economic view. However, Islam also strongly emphasizes not carrying out fraudulent buying and selling practices and always being fair in trading practices.18However, because basically the practice of buying and 15 Euis Puspita Dewi, "Marketing Strategy Analysis in Facing Business Competition (Study at the ABC Jenangan Ponorogo Store), Thesis, Faculty of Islamic Economics and Business, Ponorogo State Islamic Institute. p. 25. 16 Safar Uddin, “Business Competition,” Accessed March (2022). https://www.researchgate.net/publication/359367718_PERSAINGAN_USAHA. 17 Nurhidayah, "Business Competition Ethics According to Yusuf Qardhawi" Thesis, Faculty of Islamic Economics and Business, Pare State Islamic Institute, (2022). h. 36. 18 Neni Sri Imayati, Islamic Economic Law and Islamic Economics in Development.(Bandung : Bandar Maju, 2013), p.

13 selling activities is profit-oriented, it is very possible that things will deviate from Islamic dogma and teachings in practice. The Al-Qur'an also emphasizes the prohibition on false transactions.19In that sense, both economics and sharia economics business teachings want an economic practice to bring prosperity and prosperity to society in general. From the description of the statement above, it is necessary to at least study more deeply and thoroughly regarding healthy business competition practices, both the business competition system and price determination based on Sharia Economic Law. With the aim of looking at the similarities and differences in the concept of business competition law. b. Pricing A company between retail and others competes with each other and tries to provide excellent products, good service, the best service with the aim of attracting market prey and in order to satisfy consumers when shopping. With the aim of being able to capture market share, of course you need to innovate and provide more value to consumers compared to competitors. Also don't forget to be able to continue to develop technology and adjust pricing measures in order to attract consumer competitiveness and improve a company with the latest innovations.20 One of the components that plays a very important role in business competition is price determination. Price is an element of the marketing section. Price is also the most critical 19See QS An-Nisa: 29 which means: "O you who believe, do not consume each other's wealth in a false way, except by means of commerce that is carried out mutually between you, and do not kill yourselves; Indeed, Allah is most merciful to you." 20 Soebagyo, T. Analysis of the Influence of Store Image on Purchase Intention in "Crowded" Ngawi Department Stores.Journal of Marketing Strategy, (2014) 2(1),h. 1.

14 element. Also part of a company's marketing strategy and competitiveness. Because it is part of the price that the company can obtain income and profits so that it can guarantee the company's survival. Price is also an element that generates income. Because the other parts only generate costs.21 The product price set for an item greatly influences the quantity of goods marketed. Apart from that, the determination of an item also greatly influences costs, for the reason that the quantity sold influences the costs incurred in relation to production efficiency. Therefore, pricing is very influential in playing a role in total income and total costs.22 Pricing has two main roles that traders must play, namely the role of allocation and the role of information. The allocation role of price itself is the function of price in helping buyers to decide how to obtain the highest expected benefit or utility based on their purchasing power. Thus, prices can help buyers decide how to allocate their purchasing power to various types of goods and services.23 In Islam, the view is that markets, countries and other individuals are in balance. This means that there cannot be SubOrdinates. So that one of them becomes dominant over the others. Islam also guarantees the market its freedom. In determining the method of production and price determination. So, with the aim of avoiding disturbances that result in damage 21 Mulyana Mumuh, “Pricing Strategy,” Unitary Business and Informatics Institute, Bogor Indonesia. June (2019): p. 43. https://doi.org/10.31227/osf.io/tb2zd. 22 Verina Secapramana, “In Pricing Strategy,” Unitas 9, no. 1 Faculty of Psychology, University of Surabaya (2017): p. 32. 23 Verina Secapramana, “In Pricing Strategy,” Unitas 9, no. 1 Faculty of Psychology, University of Surabaya (2017): p. 33.

15 to market balance. However, in reality it is difficult to find a market that operates fairly on its own.24 Islamic economics, in this case, has the concept that a market can act in accordance with its foundation by adhering to the principle of free competition which can be implemented normally. Free competition here means that Muslims have the right to determine for themselves what to consume and produce and are free to choose what is needed and can fulfill life's consumption.25 c. Retail Theory As time goes by, the economy and lifestyle of the people will improve, especially the middle and upper class people who want more comfort in shopping. Apart from that, the increasing purchasing power of people's interest will also result in a large increase in the population, and there will also be changes in shopping patterns that occur in society, especially in urban areas themselves.26 There is a retail business which is a practice of selling goods and services carried out by a company to consumers in retail or retail settings such as kiosks, markets, department stores, boutiques and so on. This also includes sales activities through a delivery service system, which is generally used directly by the consumer or buyer concerned.27 24 Effendi, S. "Pricing from an Islamic Economic Perspective". MUTLAQAH: Journal of Sharia Economic Studies, (2021). 1(2), p. 29-30.. 25 Syamsul Hilal, "The Concept of Prices in Islamic Economics (Ibn Taimiyah's Thoughts)," Journal of Asas 6, no. 2. UIN Raden Intan Lampung (2014): p. 18-19. 26"The History of Modern Retail in Indonesia: From its Emergence to Its Existence in Society"https://www.kompasiana.com/budhiman/5f90e596de3439683f768cd2/histori-Retailmodern-di-indonesia-dari-kemunculan-untuk-existence-in-society, Accessed May 25, 2021, at 08:51 27 Maria L Pandin, "Portrait of Retail Business in Indonesia: Modern Market," Nuclear Instruments and Methods 164, no. 2 (2009): 255–65.

16 Traditional and modern retail are very influential in realizing all the needs and benefits of society and of course by realizing the ideals of both, they can run in balance and parallelly. However, along with the increase and progress of the global economy, the pace of modern retail is increasing more rapidly in Indonesia compared to the development of traditional retail.28 Modern retail businesses such as supermarkets and the like are widely present in various main cities in Indonesia. Especially modern retail Indomaret and Swalayan Surya Mart itself. With the demand to be able to modernize its role by providing all easy and comfortable services in shopping, price certainty and complete stock of all basic goods needed by the community, there are also many business actors who have the potential for a great and professional management process.29 Retail business is something that in its services uses an independent service system, in Islamic economic and business principles it aims to improve the welfare of society in a fair and balanced manner because on this basis the parties involved in the economic process will not oppress or exploit each other.30 Philosophically, the characteristics of the Islamic retail business include rabbaniyah (belief in God), akhlaqiyah (based on ethics), al-waqi'iyyah (according to reality, what is, does not cover up shortcomings or defects in the goods sold), and alinsaniyah ( humanity), that is, don't let Islamic Retail business 28Malano, Herman. Save traditional markets. PT Gramedia Pustaka Utama, 2013) p, 76. 29 Nicken Ayu Aulian Putri, "Competition between Modern Retail Business and Traditional Retail (Study in Tempuran Village, Trimurjo District, Central Lampung)," Thesis, Islamic Economics and Business, IAIN Metro 2020. 30 Na Ihwanudin, N., & Beladiena, AN (2020). Philosophy of Modern Retail Business in the Islamic Economy in Indonesia. MISYKAT Journal of Al-Quran Sciences Hadith Syari Ah and Tarbiyah, 5(2), 40.

17 activities actually damage the existing order of life in society or disrupt the order of life in society.31 It can be concluded from the explanation above that retail business management is the activity of planning, organizing, implementing and practicing buying and selling with the aim of achieving everything desired, such as attracting consumer needs, market functions and required resources. 1.6 Research methods Research methods are steps that are owned and carried out by researchers in order to collect information or data and carry out investigations on the data that has been obtained. The research method used in this research is a descriptive qualitative research method. This is a scientific way to obtain data with specific purposes and uses. There are four keywords that need to be considered, namely, scientific method, data, objectives, specific uses. The scientific method means that research activities are based on scientific characteristics, namely rational, empirical and systematic. Rational means that research activities are carried out in ways that make sense, so that they are within reach of human reasoning. Rational research is research that uses theory.32 1.6.1 Types of research This researchusing this type of research with a Descriptive Approach. The reason is that this method is useful for obtaining real data that occurs in the field when conducting research so that the data is then analyzed. Thus, the research report will contain data quotations to provide an overview of the presentation of the report. By collecting 31Ibid.., p. 42-44 32Sugiyono. Quantitative Qualitative Research Methods and R&D, (Bandung: Alfabeta, September 2019), P. 2.

18 data in the form of words, images, and not numbers. So everything that is collected is likely to be the key to what has been researched.33 Using a qualitative research method is a research method based on the philosophy of postpositivism, used to research the conditions of natural objects, (as opposed to experiments) where the researcher is the key instrument, data collection techniques are carried out in a triangulated (combined) manner, data analysis is inductive. /qualitative, and the results of qualitative research emphasize meaning rather than generalization.34 1.6.2 Data source In determining the accuracy and suitability of the information obtained, researchers must understand the source of the research data. Therefore researchers use the following data sources: a. Primary data Primary data sources are data sources that contain main data, namely data obtained directly in the field, which comes from sources, namely owners or employees at the Surya Mart and Indomaret Fresh Supermarket Retail businesses, Ponorogo. The following is the primary data in this research: 1) Observation data from Indomaret Fresh Ponorogo and Surya Mart Ponorogo. 2) Observation 3) Interviews and Documentation b. Secondary Data Thus, the secondary data obtained in this research comes from related books including Business Competition Jurisprudence, Sharia Economics for Level 1 Law Colleges, as well as related journals and research results related to Retail 33Lexy J. Moleong, MA Qualitative Research Methodology, (Bandung: Rosda, January 2021), P. 11. 34Sugiyono. Quantitative Research Methods…, P. 18.

19 Business Competition in Surya Mart and Indomaret Supermarkets. Fresh Ponorogo, Indonesia. 1.6.3 Data collection technique 1. Observation Observationas a data collection technique it has specific characteristics when compared to other techniques, namely interviews or questionnaires with the parties being studied. If interviews and questionnaires always communicate with people, then observation is not limited to people, but also other natural objects.35 In this case, the researcher first conducted a location survey both in terms of distance between the two retailers and their feasibility. So that it can create a balance between related retail comparisons. After that, the researcher contacted the prospective subjects concerned by asking whether they were willing to participate in the research, preparing a schedule for data collection. 2. Interview In this study the researcher also applied the interview method as a way of collecting data. Interviews are used asdata collection technique if the researcher wants to conduct a preliminary study to find problems that need to be researched, and also if the researcher wants to know things from the respondents in more depth and the number of respondents is small/small. This data collection technique is based on selfreports or at least personal knowledge and/or beliefs as well as 35Sugiyono. Quantitative Research Methods…, P. 203.

20 conducting interviews with related parties such as leaders, cashiers, buyers and employees.36 Researchers conduct interviews with selected subjects. During interviews with research subjects, researchers try to communicate and ask questions that are relevant to the research objectives, with the aim of obtaining more precise information related to the aspects that this research wishes to reveal. Data collection involves a number of diverse focuses, such as obtaining permission, applying appropriate sampling methods, developing techniques to record information in both digital and written form, managing data, and addressing potential ethical issues that may arise. 3. Documentation Documentation is a data collection technique that involves analyzing previous research documents or writings that are relevant to the current research object. The documents used can be official sources such as books, journals, theses, theses. This research was carried out online and offline, both face to face and interviews via the Zoom application or video calls via WhatsApp. Data collection through interviews was carried out once with consumers for each subject except the relevant retail leaders. Data from the subjects obtained were collected in interview sessions conducted with significant persons at different times. 1.6.4 Data analysis technique The analysis technique used by researchers is inductive analysis.With the Inductive Data Analysis Method with the aim of a 36Sugiyono. Quantitative Research Methods…, P. 195.

21 process that can find multiple realities contained in the data, inductive analysis can make the researcher-respondent relationship explicit, recognizable and accountable, analysis can fully describe the background and make decisions. -decisions about whether to transfer to another setting, inductive analysis are better able to discover mutual influences that sharpen relationships, and inductive analysis can take values into account explicitly as part of the analytical structure.37 Data analysis is a stage where data obtained from interviews, field notes and other sources are arranged systematically. The aim is so that the data can be easily understood and the findings can be conveyed to other parties. The data analysis process includes organizing, dividing data into certain units, synthesizing, identifying patterns, selecting relevant information, and drawing conclusions that can be explained to others.38 Gay (2011) explains that data analysis is an important step in qualitative research which aims to compile data with accuracy and reliability. There are three main stages in the data acquisition process, namely reducing data (data reduction), presenting data (data display), and drawing conclusions or verification (conclusion drawing/verification). Data analysis techniques are used to present a summary of research findings. Researchers apply data analysis technique steps based on the framework developed by Miles and Huberman39 . 37Lexy J. Moleong, MA Qualitative Research Methodology..., P. 10. 38 Sugiono, Quantitative, Qualitative, & RnD Research Methods (Bandung: Alfabeta, 2016): 195. 39 Nisrina, "The Role of Religion in Overcoming the Fear of Missing Out on Social Media. Case Study of Religious Studies Students at UIN Sunan Kalijaga 2018," 19.

22 Miles and Huberman (quoted in Prabowo & Rukiyah, 2019) explain that the qualitative data analysis method involves three types of activities in the data analysis process, these activities include:40 1) Data Reduction: Data reduction refers to the analytical process in which researchers select, focus, simplify, extract, and transform raw data that has been collected during observations and interviews. The goal is to get a final conclusion. 2) Data Presentation: Data presentation or data display is done by organizing and compiling information so that it is possible to explain conclusions and take action. The types of data models used include various matrices, graphs, networks, and charts that help design information that is structured in a certain way. 3) Drawing Conclusions or Verification: This stage is a process of drawing and verifying conclusions. This conclusion is drawn after the data has been reduced and presented in the form of a written narrative. 1.6.5 Data Validity Test Data is a key element in research, and to ensure the validity of the data, testing needs to be carried out. In qualitative research, data is considered valid if the information reported by the researcher is in accordance with the reality that occurred in the object under study. Data validity in qualitative research focuses on efforts to increase trust in the data. This research uses a triangulation approach to check and ensure the credibility of data from various research sources.41 In this research, triangulation is used in two aspects, namely source triangulation and technical triangulation. Source triangulation is 40 Rukiyah Prabowo, Achmad Bagus, "Digitalization of Indonesian Visual Art Archive Photo Archives in the Context of Preserving Photo Archives at the Indonesian Visual Art Archive Yogyakarta," Journal of Library Science 8, no. 2 (2020): 75. 41 Prabowo, Achmad Bagus, "Digitalization of Indonesian Visual Art Archive Photo Archives in the Context of Preserving Photo Archives at the Indonesian Visual Art Archive Yogyakarta."

23 used to verify the credibility of data by comparing information obtained from various sourcesdifferent42. Source triangulation was carried out by comparing the results of data findings from different informants regarding the business competition concept of Indomaret Retail and Surya Mart Ponorogo which experienced a lack of adjustment in integrating Sharia Economic Law. The source triangulation stage is carried out with the aim of describing, grouping, identifying similarities, differences and specifics of the data that has been collected. In this research, technical triangulation includes a comparison between the results of interviews, observations and document analysis related to the comparison of the Indomaret and Surya Mart Business Competition systems which lack adjustments in integrating Sharia Economic Law. 1.6.6 Systematic Discussion The systematic discussion aims to prepare targeted research in accordance with the field of study to obtain discussion, research entitled "Comparative Analysis of Modern Retail Business Competition Systems: Review of Sharia Economic Law (Case Study of Supermarkets Surya Mart and Indomaret Fresh Ponorogo, East Java)" divided into 4 (four) chapters as follows: First Chapter : Contains an introduction which provides background, problem formulation, research objectives and benefits, research uses which include practical and academic uses, literature review, research methods which include types of research, data sources, data collection techniques and data analysis techniques which 42 Sugiyono, Mixed Methods (Bandung: Alfabeta, 2014), 127.

24 contain the resulting data. obtained at Surya Mart Supermarket and Indomaret ITC POINT Ponorogo, conceptual basis and systematic discussion. Chapter Two : Researchers will discuss the Theoretical Framework, Business Competition Theory, Price Determination Theory, Modern Retail and Business Competition Theory as well as a direct review of Sharia Economic Law. Chapter Three : Researchers will discuss the results containing data obtained at Swalayan Surya Mart and Indomaret. Chapter Four : Contains conclusions from the research results and suggestions and recommendations for future researchers, especially regarding further considerations for this study.

25 BAB II THEORETICAL BASIS 2.1 The Concept of Business Competition in Islamic Law 2.1.1 The Concept of Business Competition in Islam The term "business competition" often appears in various articles discussing elements of business competition law. This term comes from English, "competition", which means rivalry, rivalry, or match in terms of competitive activities. Competition in business and economics refers to the process of competition between companies or business entities trying to achieve certain goals. Winning customers, gaining a larger market share, ranking high in customer satisfaction surveys, or competing for the resources needed to remain operational are some examples of such goals.43 In the world of trade competition, Islam very clearly prepares all detailed rules regarding competition law and ethics that must be obeyed, of course in accordance with those stipulated in Islamic teachings and law. This aims to avoid unhealthy competition. Because based on existing facts in the field, business competition is now very tight and wild and many are using various methods to achieve their desired desires.44There are three elements that need to be considered in business competition according to Islam:45 1) Competing parties. For a Muslim, the business carried out is to obtain and develop ownership of property which is a deposit and sustenance that has been determined by Allah. So when someone does business, they must make everything aware of Allah SWT. 43 Mudrajad Kuncoro, Strategy on How to Achieve Competitive Advantage, (Jakarta: Erlangga, 2005), p. 86. 44 Diah Sulistianingsih, "Review of Business Competition Fiqh and Islamic Business Ethics on Grocery Store Business Competition (Case Study on Jalan Barong, Kertosari Village, Babadan District, Ponorogo Regency)," (Thesis) (Ponorogo State Islamic Institute, 2022). h. 26-27. 45 Ismail Yusanto, Muhammad. Muhammad Karebet Widjajakusuma. "Initiating Islamic Business". (Jakarta: Gema Insani. 2002). p. 92-93.

26 Because basically doing business and competing in business is only something that is carried out according to God's orders and therefore business actors do not have to justify any means to win the competition. 2) Competition Method. In Islam, the practice of business competition or doing business cannot be separated from the laws that have been regulated in muamalah, because business practices are part of muamalah. So it is hoped that all practices of free competition will not justify any means because they are actually very contrary to the principles of Islamic muamalah. 3) Competing products or services. Of course, apart from products or services that have advantages, in Islam there is an obligation to consume all products and services that are halal and do not conflict with what has been stipulated in the Shari'a. In implementing the three elements of competition above, it is necessary to maintain and maintain the integrity of the brotherhood, the business competition carried out must be healthy, fair and honest. The individual's capacity to carry out all competitive practices in a manner that is in accordance with Islamic teachings is subject to Islamic ethics and morality, and has been formed by Aqidah.46Good competition carried out in a good way is also in accordance with the Islamic religion which says that whatever is done to humans must be done in a good way and must not be done in a negative way, hoping for the blessings and approval of Allah SWT. From the statement above, it is also confirmed in the Al-Qur'an surah Al-Qasas verse 77: 46 Abdul Aziz, Islamic Economics: Micro and Macro Analysis (Yogyakarta: Graha Ilmu, 2008), p. 125.

27 prayer َ َ ا كم ْ ِسن ْ أ ح اۖ و ي ْ دن ال ُّ ن ِ ك م ِصيب ن ِغ ْ ب َل ت ْ كۖ و ِل ي إ ُ ا هَّلل ن ْس أ ح ُ َل ي ن ا هَّلل ه ِ ِضۖ إ ْ ِِف اْْل ر اد الْف you َbless َGod س Meaning: And seek what Allah has bestowed upon you (happiness) in the land of the hereafter, and do not forget your share of worldly (pleasures) and do good (to others) as Allah has done good to you, and do not cause damage in ( face) of the earth. Indeed, Allah does not like those who do damage. The verse above emphasizes that what Allah has given to His servants in the form of property, you should spend it in obedience to Allah SWT. With the aim of achieving everything that is done, the reward and blessing of Allah is to give alms to people who need it more. If you do good to other people, Allah will reward you by bestowing His blessings on you, whereas Allah hates destructive people.47 Apart from that, the Qur'an provides a very comprehensive concept of business competition and business ethics. The benchmark for a person's achievement in the practice of business competition is not only in worldly matters but also prioritizing all matters of the hereafter. The explanation referred to in the Qur'an is that a truly good and successful business is a business that brings benefits and profits to the perpetrator in the two phases of a person's life, which is mortal and limited (namely the world) and life which is eternal and unlimited. namely the afterlife.48This belief can be the basis for a Muslim to practice an attitude of trust and surrender to the Creator after humans have made their best efforts and done all their work, with the aim of obtaining the development of property ownership 47 Ministry of Religion of the Republic of Indonesia, Al-Qur'an and its Translations, (Bandung: CV Publisher Jumanatul 'Ali-ART (J-ART), 2004), p. 394. 48 Rosmaya, "Pabbagang Business Competition in Pallameang Village, Pinrang District (Islamic Business Ethics Analysis)". (Thesis). (2020). h. 19.

28 accompanied by and hoping for the blessings and blessings of Allah that he has determined. 2.1.2 Principles of Islamic Teachings in Business Competition The principles of business competition in Islam are a reflection of the moral and ethical values that Muslim business actors must adhere to. Islam provides many concrete foundations and guidelines for how business actors compete and operate according to the teachings that have been established.49Among the principles of business competition in Islam, several points are adhered to, namely: 1. Principle of Monotheism. One of the main principles of the Islamic religion is the principle of monotheism, which states that there is only one God who created everything in the universe. This principle is also the main principle of the whole which refers to aspects of Muslim life in the economic, political, social and other fields which become one. This principle also applies in the world of business and business competition. The principle of Tawhid teaches that every business actor must comply with applicable rules and norms, and run his business in a good and correct manner. This is included in the principles of Islamic business ethics, which teach that business must be conducted in a fair, honest and transparent manner.50 This is also in line with what is written in the QS. Fathir verse 3 is: 49 Rosmaya Rosmaya et al., "Analysis of Islamic Business Ethics in Pabbagang Business Competition in Pallemeang Village, Pinrang Regency," DIKTUM: Journal of Sharia and Law 20, no. 1 (2022). h. 5. 50 Rosmaya et al., "Analysis of Islamic Business Ethics in Pabbagang Business Competition in Pallemeang Village, Pinrang Regency. Analysis of Islamic Business Ethics in Pabbagang Business Competition in Pallemeang Village, Pinrang Regency. DIKTUM: Journal of Sharia and Law, 20(1), (2022). h. 13.

29 ا هَّللِ ُ ْ ٍق غ ْي ِ ال ْ خ ن ِ لْ م ۚ ه ْ ُكم ْ ل ي ع ت ا هَّللِ ْم ع ِ وا ن ُ اذُْكر ُ هاس ا الن ه ُّ أ ي َي ُكو ن ف ْ ُؤ ت َّنَٰ أ ه ۖ ف و ُ َل ه ِه إ ه َٰ ل ِ اْْل رْ ِضۚ َل إ و ِ اء هسم ال ن ِ م ْ ُ ُكم ق ُ ز ْ ر ي Meaning: “O people, remember Allah's favor upon you. Is there a creator other than Allah who can provide you with sustenance from the heavens and the earth? There is no God but Him; then why did you turn away (from monotheism)" The verse above is explained in the interpretation of Jalalayn (O people) of the people of Mecca (Remember Allah's favor upon you) who has placed you in the holy land and who prevents attacks from outside against you. (Is there a creator) the letter Min here is Zaidah or addition, the pronunciation of Khaaliqin is Mubtada (other than Allah) if it is read Ghairu it means being Na'at or the Mahall characteristic of the pronunciation of Khaaliqin, if it is read Ghairi it means it is attributed to the pronunciation of Khaaliqin in Lafzhan , and Khabar Mubtadanya is (which can give you sustenance from the sky) namely in the form of rain (and) from (the earth?) in the form of plants. Istifham or the word question here contains the meaning of Taqrir, namely there is no creator and no provider of sustenance except Allah. (There is no god but Him; so why do you turn away) from monotheism of Him? Even though you have acknowledged that He is the Almighty Creator and the Almighty Giver of sustenance.51 The principle of monotheism, which is a fundamental concept in the Islamic religion, has significant implications in the context of business competition. The principle of monotheism 51 Tafsir Al-Qur'an Online, "Tafsir Jalalayn". https://tafsirq.com/35-fatir/ayat-3#tafsirjalalayn.

30 teaches principles such as justice and social responsibility in business competition, which can be interpreted as fair treatment of competitors, customers and employees. Businesses founded on these principles will strive to create a work environment that is fair and supportive of the surrounding community. This includes ensuring that profits are not made at the expense of others and that businesses operate taking into account their impact on society and the environment.52 In a business context, the principle of Tawhid also teaches that every business actor must pay attention to the interests of society and the surrounding environment. This is included in the principles of corporate social responsibility which teach that every company must make a positive contribution to society and the surrounding environment. In this case, companies must pay attention to the impact of their business activities on society and the surrounding environment, and try to reduce these negative impacts.53Apart from that, the principle of Tawhid also teaches that every business actor must pay attention to the balance between profits and losses in business. This is included in the principle of justice in Islamic business which teaches that every business actor must pay attention to the interests of all parties involved in the business, including employees, consumers and shareholders. In this case, the company must provide fair profits for all parties involved in the business.54 52 Artha Ully, "Application of Islamic Principles in Corporate Social Responsibility Regulations in Indonesia," Law Reform 7, no. 2 (2012). h. 156. https://doi.org/10.14710/lr.v7i2.12413. 53 Fitri Amalia, "Islamic Business Ethics: Concept and Implementation for Small Business Actors 6, no. 1 (2014). h. 117. https://repository.uinjkt.ac.id/dspace/handle/123456789/30987. 54 Luthfi. N. H, "Principles of Islamic Economics". Center for Sharia Economics and Business Studies. Gadjah Mada University. Posted on July 2, 2018. By Abdul Qodri. S. https://pkebs.feb.ugm.ac.id/2018/07/02/princi-princi-economics-islam/”

31 In conclusion, the principle of monotheism is the fundamental foundation of Islamic teachings. In a business context, the principle of monotheism also teaches every business actor to pay attention to the interests of society and the environment, pay attention to the balance between profits and losses in business, and pay attention to the quality of the products and services offered. This principle confirms that God is the owner of everything in this universe. Allah does not create anything in vain, it also has certain purposes and concepts. Humans were created only to pray and worship Him. Therefore, in practice, business competition should be based on the concept of self-surrender, believing that everything that is bought and sold in practice belongs solely to Allah with the aim of achieving and carrying out business with the intention of worship.55 2. Principles of Justice. Adl (Justice) is one of the characteristics of the creator among other characteristics of Allah. In Islam, the principle of justice is one of the greatest contributions to complement human life. This is also proven by the many solutions to practical problems in the modern economy. Everyone is required to work together in implementing a just economic system that is not directed at individuals. In this system, each individual becomes a resource for all organizations while working for himself and the entire community. Allah also emphasizes in the Qur'an that uphold justice on earth and in the sky and orders all creatures to uphold justice.56 55 Abdurrahman Alfaqiih, "Principles of Business Practices in Islam for Muslim Business Actors," IUS QUIA IUSTUM Law Journal 24, no. 3 (2017). h. 462. https://doi.org/10.20885/iustum.vol24.iss3.art6. 56Qs. An-Nahl Verse 90. Meaning: "Indeed, Allah commands (you) to act justly and do good deeds, to provide assistance to relatives, and He forbids (committing) vile deeds, evil and enmity. He teaches you so that you can learn from it.”

32 Apart from that, Prof. M. Quraish Shihab also defines that 'Adl has two very contradictory meanings, between straight and the same and crooked and different. According to him, a just person is a person who walks straight in his attitude and actions and always uses the same measurement, not double measurement. This equality is what Prof. Quraish Shihab calls what makes a person not take sides with one of the people in a dispute.57Apart from that, fairness is also defined as moderation, meaning neither reducing nor exaggerating. Its opponents are tyranny, persecution and evil. Therefore, in the Qur'an after the word 'adl it is followed by the word ihsan (virtue). So the application of fair actions should be followed by good actions. Meanwhile, an interesting thing was conveyed by Adiwarman A. Karim in Sharia Economic Law, that the fair concept conveyed is not unique to Islamic economics, but capitalism and socialism have their own fair concepts. In the realm of classical capitalism, their concept of justice defines "you get what you deserve" in the sense of when you get something for what you have worked for. Meanwhile, the concept of fairness conveyed by classical socialism defines "no one has a privilege to get more than others" (equal taste). Meanwhile, the concept of justice in Islam is defined as "La Tadzlimuna wa la tudzlamun" (Not tyrannizing and not being wronged).58 Islam does not limit each person's freedom to obtain a decent life and have sufficient wealth. However, in contrast to this, he must be proactive in developing a plan so that production resources are not used haphazardly to increase the success of 57 M. Quraish Shihab, Tafsir al Misbah, (Jakarta, Lentera Hati, 2004), p. 324. 58 Slamet Akhmadi and Abu Kholish, "Fundamental Principles of Islamic Economics" Islamic Economic Journal. 4, no. 1 (2016). h. 111.

33 people or groups and the absence of tyranny among weak members of society. If we look in detail at Islamic law, for example the relationship between trade and industry, then there will be modern regulations that provide opportunities for individuals to become millionaires or even billionaires. But these are rules that have reached their strict legal limits in Islam, which leaves little possibility for anyone to amass wealth freely.59 3. Nubuwwah Principles. (Prophecy) Prophethood is one of the universal values of Islamic economics because of the function of the Prophet Muhammad SAW. Which is also central in Islamic teachings, prophethood is one of the universal economic principles in Islam. Every Muslim individual, even those involved in economic activities, should adhere to the noble qualities contained in the Al-Qur'an and Hadith. The personal perfection of the Messenger of Allah was visible from a young age, and when he was appointed as an apostle, he received extraordinary respect, because of his attitude and honesty as reflected in his nickname, alamîn (the trusted one). This honesty was complemented by a brooding nature that led him to routinely isolate himself in a cave on the Hira' hill, a few miles north of Mecca. In this place, for a long period of time, the Prophet Muhammad pondered the life and suffering of society while searching for a more luxurious meaning. It was also in this place that the Prophet discovered the first revelation of Surah Al-Alaq.60 The basic values of economics and business competition in the nubuwwah concept can be seen in the four obligatory characteristics of the apostles. First, siddiq (true and honest), 59Afzalur Rahman, Islamic Economic Doctrine, (Yogyakarta, Waqf Bakti Fund, 1995). Volume 1, p. 78. 60 H. Idri, "Principles of Islamic Economics," Lintas Pustaka, Jakarta. 2021. p. 47. http://www.bibliovault.org/BV.landing.epl?ISBN=9780226763743.

34 namely whatever the Prophet said was true and conveyed honestly. It is impossible for him to lie in conveying revelations, fabricate or distort. The Prophet's truth and honesty includes honesty in intentions, honesty in intentions, honesty in words, and honesty in actions are examples of the Prophet's truth and honesty. In economics, this concept is related to the basic principles of personal integrity, emotional stability, and the ability to correctly identify and resolve business-related problems. Additionally, (Amanah) Amanah can be trusted to provide honest quotes from trusted sources and business quotes that cover things like trust, responsibility, transparency, and punctuality. In the business world, the third, Fathanah (intelligent), has broad knowledge and vision, intelligent leadership, is aware of products and services and continues to learn. Fourth, tabligh (conveying Islamic teachings), the basic values in business are communicative, able to sell intelligently, able to describe tasks, delegate authority, work in teams, coordinate, exercise control and supervise between teams.61 As a Muslim, you should not be bothered looking for a successful businessman figure at a young age, he is Rasulullah Muhammad Saw. He is a reliable businessman, honest trader, successful and modest. The character and teachings of the Prophet Muhammad (SAW) in carrying out business processes are truly noble and can be an example for business people today. The Prophet Muhammad has set an example of how to run an ethical and profitable business with conditions of truth, honesty and trustworthiness and based on sharia values. The Prophet Muhammad ran his business professionally by following the 61 Khasanah, F. "Analysis of Nubuwwah Principles of Trader Behavior at Tanjung Market, Jember Regency". (Thesis, Kiai Haji Achmad Siddiq State Islamic University Jember). (2019). h. 48.

35 instructions verse by verse in the Koran. These values become a foundation that can direct us to remain in the corridor of honesty, justice and truth as well as blessings that invite the pleasure of Allah SWT. These foundations or rules are the legal basis for conducting Islamic business.62 4. Principles of the Caliphate. (Leadership) is the term for a person or leader of a country or government as head of state and exercising control over the economic principles of Islamic law. In relation to Islamic economic policy, the role of national leaders is very important in terms of planning, supervision, legality, allocation and distribution of daily income and donations. In this context, the government or leader of a country has a strong position in controlling the economy. The government and leaders of a country must remain focused when discussing economic policies that are in line with Islamic economic principles. The most important role is to ensure that the economy in a country is implemented properly in accordance with sharia without any violations of established rules or distortions.63 The Caliph Principle means one of the mandates from Allah SWT to make his servant a leader in the universe by using all resources and prosperity together and by realizing harmonious coexistence, especially from the socio-economic aspect. In business competition, the application of caliphate principles is realized by making democratic leaders, respecting each other and maintaining mutual solidarity, competing in a healthy manner, not cheating and partnering with competitors, not 62 Yusron Ali Sya'bana et al., "Business ala Rasulullah in a Marketing Perspective Business ala Rasulullah in Marketing Perspective," Journal of Sharia Finance and Banking Research 4, no. 2 (2022). h. 194 - 195. 63 Widyan. L. "Basic Principles of Islamic Economic Development Plans," Journal of Islamic Economics and Business (JIEB) 03, no. 02 (2019). h. 180.

36 corrupting/manipulating financial data, sharing profits according to their portions, maintaining commitment, producing halal goods with benefits to the community, empowering the economy of the surrounding community, and environmentally friendly business activities. Of course, this will be realized if the implementation is carried out with commitment without abandoning sharia economic principles.64 The caliphate principle in business competition can refer to the principles of Islamic ethics that Muslim entrepreneurs must follow in running their businesses. This is based on the concept that a Muslim is a caliph on earth, also tasked with bringing about all prosperity and prosperity in human life. 2.2 The Concept of Pricing in Islam 2.2.1 Get to know the concept of pricing in Islam Price is value expressed in terms of dollars and cents, or any other monetary medium of exchange. which more or less means that price is the value expressed in dollars and cents or other monetary medium as a medium of exchange.65In another reference, it is stated that price can be interpreted as the amount of money possibly plus the goods needed to get a number of combinations of goods and services.66According to Alex S Nitisemito in his book, price is explained as the value of a good or service which is measured in an amount of money, the value of which a person or company is willing to transfer ownership of the good or service to another party.67According to Rachmat Syafei, the price only occurs in the contract, that is, something that is agreed to in the contract is either less, greater, or 64 Mahmudah Mulia. M, "Social Entrepreneurship Realizes Community Welfare Based on Sharia Economic Principles". El-Iqthisady: Journal of Sharia Economic Law, 2 (2020). h. 73. 65 William J. Stanton, "Principles of Marketing." (Jakarta: Erlangga, 1984). h. 12. 66 Basu DH Private, "Modern Marketing Management". (Yogyakarta: Liberty, 1986). h. 147. 67 Alex S. Nitisemito, "Personnel Management- Human Resource Management". (Jakarta: Ghalia, 1991). h. 55.

37 equal to the value of the goods. Usually the price is used as an exchange for goods agreed to by the two parties making the contract.68 From the statements above, price can be interpreted as a monetary unit or other measure, including goods and services exchanged to obtain the right to own or use a good or service. And it is also one of the marketing mix elements that provides income or income for a company compared to other marketing mix elements such as product, promotion and distribution.69 As previously explained, the market does not expect intervention from any party, including the state with pricing authority. This is because basically the market does not need free power to determine what should be consumed and produced. Each individual is free to choose for themselves what is needed and how to fulfill it. This is the normal pattern of the market or 'natural order' in al-Gazali's terms relating to market evolution. Furthermore, Adam Smith stated to just leave it to the invisible hand, and the world will order itself." The basic decisions of economic actors are voluntary so that authority and command are not needed.70 In this understanding, the price of a commodity (goods and services) is determined by supply and demand, changes that occur in the current price are also determined by changes in demand and supply. This is in accordance with the hadith narrated from Anas that one day there was an extraordinary increase in prices during the time of Rasulullah SAW, so the companions asked the Prophet to lower the prices at that time, then the Prophet said which means, "That Allah SWT is the One who takes and 68 Mustafa Edwin Nasution, et al., Introduction to Islamic Economics, Kencana, Jakarta, 2007. p. 160. 69 Tjiptono Fandy. "Service Management". (Yogyakarta: Andy Offset, 2001). h. 151. 70 Mubarok, J. et al. “Sharia Economics for Level 1 Law Universities. Department of Sharia Economics and Finance - Bank Indonesia, Jakarta. (2021). h. 73.

38 gives something, a substance that provides sustenance and determines prices.”71 Furthermore, pricing is an important process in marketing management where a company or business determines the prices that will be charged for the products or services they offer to customers. In Islam, pricing is called tas'ir in Arabic, derived from sa'ara (fi'il madhi), yusa'iru (fi'il mudhori), tas'iiran (mashdar). Which in its meaning is an agreement on a price (al-ittifaq 'alas I'rin).72Several scholars have defined it, including according to Shaykh Zakaria Al-Ansari, a Shafi'iyah cleric who stated that tas'ir is an order from a ruler or head of state to business people or markets not to sell their wares except at a certain price. According to Imam AlBahuti, a Hanabilah cleric, tas'ir is the fixing of prices by the imam (caliph), the leader of the country or who represents the country, on people who carry out market practices and ask them to buy and sell at a predetermined price.73 From the several definitions of the ulama above, it can be concluded that the tas'ir referred to by the ulama is price fixing that is set directly by the leader of the country or government. In Muamalah jurisprudence, it is stated that price determination only occurs in contracts, namely a determination of the agreement agreed to in the contract, whether it is less, greater or equal to the value of the goods exchanged. This means that the price is used as a determination in an exchange of goods which must be mutually pleasing between the two parties making the contract. Determining prices is also an agreement in the practice of buying and 71Ibid., 72 Ibnu Manzhur, Lisanul Arab, IV/35, Quoted by Ahmad Irfah, At-Tas'ir Ahkamuhu Dirasah Fiqhiyah Muqaranah, p. 4. 73Ibid.., p. 5.

39 selling goods and services where the agreement is approved and approved by both parties.74 In this case, Ibn Taymiyah, quoted by Yusuf Qardhawi, also said that price determination has two forms, there are those that are halal and those that are haram are not allowed. Tas'ir who are unjust, that is what is prohibited and not permitted and there are those who are just, that is what is permitted. Furthermore, Qardhawi stated that when price determination is carried out by forcing sellers to not accept prices that they do not agree with, then this action is not permitted by religion. However, if determining the price creates a benefit of justice for society, such as establishing a law not to carry out the practice of buying and selling above the official price, then this action is permitted by religion and can be implemented.75This is also in line with what is written in the Al-Qur'an Surah An-Nisa (4): 29. ْْي ب ْ ال كُم و ْ ْكُلُوا أ م ُوا َل َت ن آم ين ذِ ه ا ال ه ُّ أ ي َG o d َ w i l l i n g يَ ْ كُم Which mean: "O you who believe, do not devour each other's wealth in a false way, except by means of commerce that is carried out mutually between you." The verse above interprets that all good transactions that are in accordance with Islamic law are based on voluntariness between both parties, both seller and buyer, including in terms of price determination. From the opinion of the Fukaha', the market mechanism in determining prices has actually been discussed, although it is still a fairly simple pattern. In this case, the Syafi'iyah and Hanabalah scholars agree that it is absolutely forbidden to fix prices, whereas in this case the 74 Rachmat Syafei, "Fiqh Muamalah". (Bandung: Pustaka Setia, 2000), p. 87. 75 Yusuf Qardhawi, "Islamic Economic Norms and Ethics". (Jakrta: Gema Insani Press, 1997), p. 257.

40 Hanafiyah and Malikiyah scholars allow price fixing, but only in certain cases and circumstances.76Asy-Syafi'iyah and Hanabalah really emphasized that the government has no right to set prices. This is also closely related to the writings of Ibn Qudamah Al-Maqdisi, one of the famous thinkers from the Hanbali school who wrote: Facebook “The imam (government leader) does not have the authority to regulate prices for the population. Residents may sell their goods, at any price they like.”77 Furthermore, the ash-Shafi'iyah ulama group also stated: حيرَ مالتسعْيولوَ كَ willing َGod "Tas'ir is prohibited even when prices rise, where the market authorities order not to sell their (traders') merchandise except at a certain price which causes the traders to have difficulties in their possessions. This applies not only to food.”.78 From the two opinions above, it is clear that the leader or government does not have the right and authority to set prices for business actors even at certain times. Business practitioners are allowed to sell their merchandise at any price, because limiting traders to certain price conditions will make it difficult for traders. This provision also does not apply only to food, but also to other merchandise. 76 Wahbah az-Zuhaili, "al-Fiqh al-Islami wa-Adillatuhu", (Damsyik : Dar al-Fikr, 1997), juz IV, p. 2695. 77 Abu Muhammad Abdullah bin Ahmad bin Qudamah, "al-Mughni ash-Syahr al-Kabir", (Bairut : Dar al-Kutb al-'ilmiyah, t.th), juz IV, p. 280. 78 Abu Zakaria Yahya bin Syarf an-Nawawi, "Mughni al-Muhtaj ila Ma'rifah fi Alfazh alMinhaj", (Egypt: Musthafa al-Babi al-Halabi wa Auladuhu, 1985), juz II, p. 38. Wahbah az Zuhaili, op.cit., p. 2695-2696.

41 Some scholars who follow ash-Shafi'iyah have different opinions from those written above, such as Ibn Raf'ah asy-Shafi'i who allows the government to intervene in price setting in situations where prices are rising.79Likewise, the Hanafiyah and Malikiyah who have a different opinion from the Syafi'iyah and Hanabalah, they allow imams to perform tas'ir, with the aim of avoiding or even rejecting harm and ensuring the benefit of the community and also prohibiting traders from increasing prices.80This was also confirmed by Ibn Taimiyah in al-Hisbah explaining tas'ir: Words "Entrepreneurs may not set prices for people unless it is related to the public interest." 81 From the above definition, it can be concluded that Abu Hanifah's followers are of the opinion that if there are traders who play price games for goods or services which can be detrimental to buyers, then the condition here is that the government may interfere in determining it, or even traders can be forced if they do not participate in implementing it. In line with what was stated above, Malikiyah also believes that if an item moves up in price in the market and then there are traders who try to sell goods or services at a higher price than what has been agreed, then traders like this must be prevented. However, if on the contrary, the trader wants to sell at a cheaper price then there are two opinions in the Malik School of thought. Some say that this action must be prevented on the grounds that it will damage the agreed market price, while others want this 79 Ahmad bin Abd al-Halim bin Taimiyah, t,th, "Al-Hisbah fi al-Islam aw Wazhifah aalHukumah al-Islamiyah", Bairut: Dar aal-Kutub al-Ilmiyah. 80 Wahbah az-Zuhaili, "al-Fiqh al-Islami wa-Adillatuhu", Damascus : 1997, Dar al-Fikr, juz IV”. 81 Ahmad bin Abd al-Halim bin Taimiyah, op.cit., p. 40-41.

42 practice to be allowed.82This is also confirmed in the reasons put forward by Imam Malik which is contained in our Al-Muwatha' is the atsar of Umar: willing َGod: َWords اماَ انَ ترفعَ منَ سوقنا( "From Yunus bin Saif from Said bin Musayyab: Indeed Umar bin Khattab passed in front of Hatib bin Balta'ah who was selling wine in the market, Umar said to him about the price of the wine, "You must increase the price, and if not you leave the market we". Imam Malik said that if someone wants to damage the market by lowering the price below the price of other sellers, then I think it should be said to him: you choose to follow the prices of other sellers or your goods will be withdrawn from the market. This is what some of the capitalist popes did to the Jews and their friends. They lower the price of their goods below the normal standard price, then sell them - even at the risk of making a loss - to bring down the market so that small traders will suffer losses, even go bankrupt. Then they control the market and monopolize the merchandise so they can control sales at whatever price they like.83 2.2.2 Price Determination Methods in Islam In the Islamic economic concept, price determination is carried out by market forces, namely the forces of demand and supply. In Islamic economics, the meeting of demand and supply must occur on a mutually voluntary basis or what is called anta'radhin minkum, where no party feels forced to transact at that price level. This means that the transaction must be carried out without any coercion or fraud, and both parties must agree to the terms of the transaction. Islamic economic principles emphasize the 82 Ibn Qayyim al-Jauziyyah, "At-Thuruq al-Hukmiyah fi as-Siyasah ash-Syari'ah", (Bairut: Dar al-Kutub al-Ilmiyyah, t.th), p. 254. 83 Yusuf Qardhawi, "The Role of Values and Morals in the Islamic Economy". Translator Didin Hafifuddin, (Jakarta: Rabbani Press, 1997), p. 466.

43 importance of justice, mutual consent between both parties, and mutual benefit in economic transactions.84 From the statement above, basically there are four main types of pricing objectives, namely 1) Net profit or profit-oriented pricing: This objective focuses on maximizing profits by setting prices at a level that produces the highest possible profit margin based on the values has been prescribed. 2) Volume-oriented pricing: This aims to increase sales volume by setting prices at a level that encourages customers to buy more. 3) Image-oriented pricing: This objective focuses on creating a certain image or perception of a product or brand by setting prices at a level that reflects quality, exclusivity or prestige. 4) Price stabilization objective: This objective aims to maintain price stability by setting prices at a level that prevents fluctuations caused by changes in demand or supply. The choice of pricing objective has important implications for a company's competitive strategy. The objectives must be consistent with the company's overall position in the market and its competitive environment. For example, a company that wants to compete on price might choose a volume-oriented pricing strategy, whereas a company that wants to differentiate itself based on quality or exclusivity might choose an imageoriented pricing strategy.85 In pricing, there are various pricing methods, and the method used depends on the pricing objectives that a company wants to achieve. The most common pricing method in manufacturing is to add a percentage above the cost of goods manufactured, while in trade, it is to add a percentage above the cost of goods sold. In the case of services, pricing is usually based on the costs incurred and the time and energy expended in 84 Nur Rahmawati, "The Concept of Economic Balance in Market Mechanisms and Price Determination from Ibnu Khaldun's Perspective". JUSTISIA ECONOMICS Journal 3, no. 2 (2019). h. 9-10. 85 Khodijah Ishak, "Pricing Reviewed from an Islamic Perspective". IQTISHADUNA: Our Scientific Journal of Economics, 6.1 (2017). h. 39-40.

44 providing services to customers. Fandy Tjiptono groups pricing methods into four basic categories, namely demand, cost, profit and competition based.86 1) Demand Based Pricing This method places more emphasis on factors that influence customer preferences and tastes than on costs, benefits, and competitive factors. Customer demand itself is based on various considerations such as: purchasing power, customer willingness to buy, product position in the customer's lifestyle, benefits the product offers to customers, price of alternative products, potential market for the product, non-competitive nature. price, general consumer behavior, segments within the market. The demandbased pricing method consists of: skimming pricing, penetration pricing, prestige pricing, price lining pricing, odd-even pricing, demand-backward pricing, and bundle pricing. 2) Cost-Based Pricing In this method, the most important price factor is not the demand aspect but the supply or cost aspect. Prices are set based on production and marketing costs plus a certain amount so that it can cover direct costs, overhead costs and profits. Included in this method are: standard markup pricing, cost plus percentage of cost pricing, cost plus fixed fee pricing and experience curve pricing. 3) Profit-Based Pricing This method tries to balance income and costs in setting prices. This effort can be carried out on the basis of a specific profit volume target or expressed as a percentage of sales or 86 Muslimin, S., Zainab, Z., & Jafar, W. "The Concept of Pricing in an Islamic Perspective". Al-Azhar Journal of Islamic Economics 2.1 (2020). h. 1-11.

45 investment. This method includes: target profit pricing, target return on sales pricing and target return on investment pricing. 4) Competition-Based Pricing Prices can be set on the basis of competition, i.e. what competitors are doing. Competition-based pricing methods consist of four types, namely customary pricing, above, at, or below market pricing, loss leader pricing, and sealed bid pricing. Islam is very concerned with the issue of price balance, especially on the role of the State in realizing price stability and how to overcome the problem of price instability. Scholars differ in their opinions regarding whether or not the state can set prices. Some scholars reject the role of the State in setting prices, while other scholars justify the State setting prices. The original law is that there is no price fixing (al-tas'ir), and this is the agreement of jurisprudence experts. Imam Hambali and Imam Syaf'i forbade setting prices because it would cause trouble to the community, while Imam Maliki and Hanafi allowed fixing prices for secondary goods.87 In Islamic concepts, the most principle is that prices are determined by the balance of supply and demand. This balance occurs when the seller and buyer are willing to accept each other. This willingness is determined by the seller and buyer and the buyer in maintaining the goods. So, the price is determined by the seller's ability to provide the goods offered to the buyer, and the buyer's ability to obtain the price of the goods from the seller. The price determination mechanism in Islam is in accordance with Maqashid al-Syariah, namely realizing benefits and avoiding damage among humans. If the Prophet had directly set prices at that time, it would 87 Adawiyah, Anisah Luthpi, et al. "The Concept of Economic Balance on Market Mechanisms and Price Determination in an Islamic Perspective." Journal of Education and Counseling (JPDK) 4.6 (2022). h. 3313-3314.

46 have been contradictory to market mechanisms. However, in certain situations, under the pretext of Maqashid al-Syariah, price determination becomes a necessity for the reason of upholding human benefit by fighting market distortions (combating mafsadah or damage that occurs in the field).88 In this case, Muslim economists, namely Abu Yusuf, Al-Ghazali, Ibnu Taymiyah and Ibnu Khaldun also provided statements regarding price determination methods including:89 Abu Yusuf,In his opinion, the influence of price on the quantity demanded of a commodity is negative, if there is a shortage of goods then prices tend to be high and vice versa if goods are abundant then prices will tend to fall or be lower. So the law of demand says that if commodity prices rise, the quantity of commodities purchased will decrease, and if prices fall, consumers will increase the quantity of commodities they will buy. Abu Yusuf stated: "Sometimes food is abundant but still expensive and sometimes food is very little but cheap."90 Next, Ibn Khaldun. In his book Muqoddimah he wrote a chapter entitled "Prices in the City" in which Ibnu Khaldun divided types of goods into two types, namely basic necessities and complementary goods. According to him, if a city develops and then its population increases (big city), then trade in basic necessities gets priority. The supply of basic commodities for residents of big cities is much greater than the supply of basic commodities for residents of small cities. According to Ibnu Khaldun, residents of large cities have a supply of basic commodities that exceeds their needs, so the prices of basic commodities in large cities are relatively cheaper. Meanwhile, the supply of basic commodities in small 88Ibid., p. 3313-3314. 89 Fauzia, IY, & Riyadi, AK "Basic Principles of Islamic Economics from Maqashid alSyari'ah Perspective". Jakarta: Kencana Prenadamedia Group. (2014). 90Karim, A. "Islamic Microeconomics". Jakarta: PT. Raja Grafindo Persada. (2022).

47 towns is relatively small, therefore people are worried about running out of food, so the price is relatively expensive.91 Rising disposable income can increase the marginal propensity to consume luxury goods for each city resident. This creates new demand or increased demand for luxury goods, as a result the price of luxury goods will also increase. In another part of his book, Ibn Khaldun, he said: “When there are few goods available, prices will rise. However, if the distance between cities is close and it is safe to travel, many goods will be imported so that the availability of goods will be abundant, and prices will fall." Thus, as Ibn Taimiyah, Ibn Kahaldun has also identified the forces of demand and supply as determining price balance. 2.2.3 Principles of Price Determination in Islam In Islam, human interactions with other humans that occur in everyday life are also called muamalat. Muamalat is a term used in Islam to refer to interactions between humans in everyday life, especially those related to matters of property, contracts and buying and selling.92Muamalat has two meanings, namely a general meaning which refers to all social interactions between humans, and a special meaning which refers to laws relating to property and contracts.93Apart from that, the aim of muamalat is to create harmonious relations between humans and create a fair and just society. The scope of muamalat covers various aspects of economic life, such as buying and selling, renting, borrowing 91 Sharia Economic Education, "Review of Ibnu Khaldun's Muqaddimah Book". Center for Sharia Economics and Business, Faculty of Economics and Business, University of Indonesia. Accessed 14 August 2020. https://pebs-febui.org/3419/sigi-ulasan-buku-muqaddimah-ibnukhaldun/. 92 Ayu's Grace. S, "The Meaning of Muamalah in Islamic Law, Its Principles, Forms and Aspects". Accessed and Updated 08, December 2021). https://www.liputan6.com/hot/read/4731432/arti-muamalah-dalam- Hukum-islam-principlesforms-and-aspectnya 93 Admin HES Fasya IAIN Kediri, "What is Muamalah". Accessed March 16, 2023. https://hes.iainkediri.ac.id/2023/03/16/apa-itu-muamalah/

48 and borrowing, and other financial transactions. Muamalat is also based on rules and regulations and comes directly from the Koran and Sunnah, and is open to interpretation and development through ijtihad, namely the process of legal reasoning.94 1. Muamalat Principle The principles of muamalat include basic terms which can be said to be the theories that form the law of muamalat. These muamalat principles develop as the human body grows and develops. The principles of muamalat are as follows:95 1) First,the principle of taba'dulul mana'fi': namely that all forms of muamalat interaction must obtain mutual benefits and mutual benefits for each party involved. This principle is a continuation of the principle of atta'awun or mu'awanah so that this principle aims to create cooperation between individuals or parties in society in order to fulfill each other's needs in the context of mutual prosperity. 2) Second,principle of equality; namely the application of the principle of justice in the field of muamalat which requires that assets are not only controlled by a few people so that assets must be distributed evenly among the community. This principle is an implementation of the word of Allah al Hasyr verse 7 which states that wealth should not only circulate among rich people. On the basis of this principle, social rights are formulated that must be fulfilled by rich people. 94 IAIN Pare, "Benefits and Scope of Muamalah in Islam". Accessed on 20 August 2019. https://muamalah.iainpare.ac.id/2019/08/ benefit-dan-ruang-lingkup-muamalah.html?m=1 95 Juhaya S. Praja, "Philosophy of Islamic Law". (Bandung: PT. Lathifa Press with IAILM Suryalaya Sharia Faculty, 2004).