Full-Service Restaurants in Malaysia

PROSPECTS

Diverse ethnic demographics drive growth in fusion cuisine

In 2019, Malays accounted for more than half of the country’s population, while there was also significant minorities of Chinese, Indians and other non-Malay indigenous groups. Asian full-service restaurants contributes the largest share in full-service restaurants, while other full-service restaurants holds the second largest share.

Impact of tax and regulations on full-service restaurants

During 2019, full-service restaurants were affected by the removal of the Goods and Services Tax (GST), which was replaced by the Sales and Services Tax (SST) in 2018. This move means foodservice operators are only required to pay service tax if their annual sales exceed MYR1 million and is designed to ease the burden on Malaysian consumers when dining out by increasing their purchasing power.

Industry players become increasingly innovative in order to adapt to new tax regime and growing consumer price sensitivity

Consumers are becoming increasingly price sensitive and prefer quick and affordable meals. As a result, many only visit full-service restaurants seasonally or for family gatherings.

COMPETITIVE LANDSCAPE

Local independent operators excel in localised flavours and dining culture

The challenge for many international chains in trying to establish an appealing presence in Malaysia is blending their offerings with local flavours and dining culture. Independent local full-service operators have a competitive advantage with respect to authentic local tastes and can supplement this with quality imported food from overseas.

Opportunities lie in occasions and delivery availability

With the fast-growing competition in third party food delivery in Malaysia, the lines between format types are blurring, much of which is also due to technology. As a result for full-service restaurant operators to differentiate on third party food delivery platforms, the focus is not on format type but in the occasion – social occasions, remote work occasions, meals at midnight occasions.

Sushi King moves out of shopping centres and into smaller outlets

Domestic player Sushi King is switching to small outlets particularly in standalone format and travel locations such as forecourt retailers and airports. Consumers are visiting shopping centres less often and are increasingly reliant on food delivery, which is encouraging the company to move out of shopping centres in order to reach a wider consumer base and lower costs.

Files are delivered directly into your account within a few minutes of purchase.