Limited-Service Restaurants in Indonesia

PROSPECTS

LSR is performing healthily thanks to millennials

Limited-service restaurants saw an excellent performance during the review period due to outlet expansion and increased transactions thanks to the rise in fintech companies and their aggressive promotional activities, including cashback and discounts. Millennials, who appreciate the ease, convenience and taste of fast food, are also contributing to category growth.

Localised menus continue to be preferred

The Indonesian foodservice industry is characterised by diverse consumers with varied tastes and preferences. Foodservice players therefore need to be creative with new products, services and offers.

LSR will continue to see strong growth over the forecast period

The outlook for the restaurant business in Indonesia is predicted to continue positively as long as the dollar exchange rate is favourable because although most of the raw materials used by LSR players are sourced locally, some such as meat and cheese are imported. As the Rupiah is currently getting stronger, the outlook is positive, however players should prepare in case the rupiah weakens, as it did towards the end of the second semester of 2018.

COMPETITIVE LANDSCAPE

KFC continues to be the leading player

KFC is the leading player in 2018, recording strong value sales growth in the year and over the review period. Before entering the fourth quarter of 2018, KFC had already reached its growth target.

Local LSR chains are joining the competition with strong strategies

Local brands, including Eatlah and Flip Burger, which have emerged in recent years, have their own key success factors depending on their concepts and target markets. For example, the target market of Eatlah is the millennial generation and those who work near Eatlah outlets, so targeted marketing and adjusting to the needs of this group is essential.

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