The full-service restaurants channel has been severely impacted by the COVID-19 crisis, suffering from restrictions on social movement and the operations of physical outlets, and also from the significant increase in consumer budget-consciousness resulting from measures imposed to contain the disease. Increased consumer price-sensitivity has hit full-service restaurants particularly hard because of the relatively high selling prices (further increased by the imposition of sales taxes) typical of the channel.
With dine-in services prohibited or severely restricted, full-service restaurants operators worked to establish or improve their takeaway and delivery capabilities during the COVID-19 crisis. In 2021, such services were facilitated by the emergence of the AirAsia Food Delivery mobile app in August and the launch of Shopee Food in September.
In May 2021, Pandamart by Foodpanda (a third party food delivery company) introduced meal kits that allowed consumers to cook conveniently at home. The offer included products such as personal pizza meal kits, which were delivered directly by Foodpanda to consumers’ doorsteps.
Having been severely impacted by measures imposed to contain COVID-19 during 2020 and 2021, the full-service restaurants channel is expected to see a slow recovery over the forecast period and is not set to reach pre-pandemic levels in current value, constant value or volume terms by 2026. Independent full-service restaurants is expected to exhibit a slower recovery than the chained segment due to the closure of outlets in 2021, including well-known venues such as Oriental Cravings, Mum’s Place and Donald & Lily Restaurant.
Full-service restaurants players are likely to face growing competition from convenient packaged food options during the forecast period, as consumers returning to busy lifestyles look for meal solutions that minimise the time and effort of preparation. Frozen ready meals, spanning products such as pizza, fried rice, and nasi lemak, are becoming increasingly popular amongst consumers and have the opportunity to build on the trend towards cooking at home resulting from the COVID-19 crisis.
Existing full-service restaurants players are expected to utilise integrated systems to smoothen their operations and reduce their labour costs over the forecast period. For instance, through the use of new mobile apps that include table reservations, the management of membership and reward systems, and online ordering for dine-in, takeaway, drive-through and even home delivery scenarios.
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Full-Service Restaurants
FSR (full-service restaurants) encompasses all sit-down establishments where the focus is on food rather than on drink. FSR is characterized by table service and a relatively higher quality of food compared to quick-service units. Menus offer multiple selections and may include breakfast, lunch and dinner. Preparation of food products is often complex and involves multiple steps. NOTE: restaurants types catalogued in this segment refer to table-service only (outlets with a proper “full table service:” wait staff attending customers and taking orders at the tables). Outlets with “limited table service” are excluded from FSR. For example: outlets where customers order their food at the counter are excluded (even though the waiter will then bring the food at the table).
See All of Our DefinitionsThis report originates from Passport, our Full-Service Restaurants research and analysis database.
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