Full-Service Restaurants in Indonesia

2020 IMPACT

The high-end positioning of-service restaurants places extra pressure on demand

While all consumer foodservice channels faced a difficult trading scenario during 2020, full-service restaurants found itself under particular pressure during the year. This is because the negative impact of the COVID-19 pandemic on demand was felt more deeply felt by category players because of the more affluent target consumer audience that the channel has in comparison with limited-service restaurants.

Certain restaurant formats face difficulties due to legitimate hygiene concerns

Some of the most popular formats in full-service restaurants in Indonesia faced scrutiny during 2020 as the COVID-19 pandemic exposed widespread hygiene concerns. Included in this category of potentially problematic full-service restaurant formats were buffets, hotpot restaurants and various other table sharing concepts that have traditionally been popular in full-service restaurants in Indonesia but which suddenly fell victim to more circumspect attitudes as the pandemic situation unfolded over the course of the year.

Themed heading 3

In Indonesia, full-service restaurants can generally be divided into two categories. The first refers to those restaurants that cater to more affluent middle-income and high-income consumers.

RECOVERY AND OPPORTUNITIES

Diversification likely to be key to survival and success in full-service restaurants

The extremely difficult trading situation that unfolded for Indonesia’s full-service restaurants over the course of 2020 has had at least one positive impact: category players are now fully aware of the importance of maintaining a diverse and agile positioning, so as to have options in terms of deciding how to manage their strategy should demand come under pressure for any reason. Indeed, the category players that had already adopted a more diverse and flexible positioning were also those that found it easy to develop effective strategies for overcoming the COVID-19 crisis and to remain relevant in the post-pandemic trading landscape.

Home delivery services expected to remain popular during the forecast period

The increasing focus on home delivery that spread across full-service restaurants like wildfire during the COVID-19 pandemic during 2020 is expected to remain in effect throughout the forecast period as the category’s leaders have already discovered the major advantages that operating home delivery services represent. Ismaya Group for instance responded to the onset of the COVID-19 situation by launching an online food market named Ismaya Gourmet Shop, which centres on a home delivery service.

The popularity of ready-to-heat meals expected to explode during the forecast period

One of the major takeaways from the shift towards omnichannel strategies that was seen in full-service restaurants over the course of 2020 is the massive potential that exists for growth in sales of ready-to-heat meals ordered online and delivered to consumers, either in chilled or frozen format. In particular, this responds to the needs of more affluent urban dwellers who found themselves working from home during the PSBB quarantine period and who are expected to be working from home much more often, even once the COVID-19 situation has been resolved.