Full-Service Restaurants in Indonesia

PROSPECTS

Growth of full-service restaurants stems from chained outlets and consumer lifestyles

During the review period, the growth of full-service restaurants has been partially assisted by the growth of fintech companies, such as GoPay and OVO, which offer consumers discounts or cashback as a means of promoting their products. Indonesia’s increased urbanisation and a rise in the number of office workers and the consequent growth of disposable income and household consumption has also benefited full-service restaurants.

Performance is heavily influenced by consumer behaviour

Full-service restaurants can be divided into two groups, namely those that cater to the middle-high to high end of the market, and those that target the lower-income group. Both groups have a different impact on the category as a whole.

Full-service restaurants will continue to grow positively over the forecast period

Over the forecast period, it is predicted that full-service restaurants will continue to grow positively, but at a declining rate as consumers are increasingly inclined to dine in categories that offer a faster service. Due to the promotions offered by fintech companies during the review period, consumers are moving towards cheaper snacking options that can be consumed on the go, including when strolling around shopping centres.

COMPETITIVE LANDSCAPE

Pizza full-service restaurants, especially chained operators are winning

Due to the large number of outlets and its long-established brand, Pizza Hut is the leader in full-service restaurants. It is considered the pioneer that established consumer awareness and liking of pizza.

Cross-category strategies stimulate consumer interest and widen consumer base with a strong focus on millennials

The growth of full-service restaurants will continued to be diminished by competition from limited-service restaurants over the forecast period due to the vast growth of third party delivery apps such as Go-Jek’s Go-Food, which has dominated the nation’s food delivery market. Moreover, Indonesian consumers will increasingly opt for casual and quick service formats for their convenience and extended opening hours.

Growing trend towards halal certification

More restaurants in this category are focused on achieving halal certification in response to growing demand among Muslim communities in Indonesia for halal food. Since October 2019, it has been law for all food and beverages services to implement halal certification.

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