Self-service cafeterias faced a challenging year during 2020 as the influence of the COVID-19 pandemic placed significant pressure on sales. The main factor negatively influencing sales in the channel is that self-service cafeterias are rarely chosen by consumers looking for takeaway service, which placed pressure on the channel’s ability to attract customers due to the strict adherence to the principles of social distancing and home seclusion that was seen in Indonesia throughout the year.
Self-service cafeterias is a consumer foodservice channel that in Indonesia is highly dependent on consumer foot traffic in retail outlets for generating revenues. This is because the majority of outlets in the channel are located adjacent to supermarkets, hypermarkets, or large-format stores such as IKEA homewares and home furnishing stores.
With consumer footfall and sales under severe pressure during the COVID-19 pandemic, 2020 saw IKEA Indonesia file for Halal certification in an effort to boost sales and mitigate the negative impact of the COVID-19 pandemic. This can also be seen as part of IKEA Indonesia’s general efforts to provide a greater sense of security and comfort to its retail customers who choose to dine in its IKEA Restaurant and Café consumer foodservice outlets, as well as to comply with government regulations.
The forecast period is expected to see self-service cafeterias make a slow and potentially difficult recovery from the unfavourable scenario that unfolded for the channel over the course of 2020 due to the COVID-19 pandemic. With the vast majority of outlets in the channel located within large-format retail outlets, including hypermarkets and supermarkets, the shift towards e-commerce and proximity retailing via convenience stores and traditional grocery retailers is likely to present major challenges for all operators in the channel that rely on adjacent retail outlets for customer footfall.
Even though all IKEA Restaurant outlets are classified as self-service cafeterias, however, they differ from most other outlets in this channel as the food menu is fixed and does not change from day to day, unlike most other Indonesian self-service cafeterias, in which food menus tend to change substantially from one day to the next. This means that IKEA Restaurant now has the opportunity to explore its options for developing online-to-offline sales channels.
At the height of the COVID pandemic, IKEA Indonesia implemented strict health and hygiene protocols in its Indonesian self-service cafeterias, as recommended by government authorities to ensure the safety and comfort of customers and employees. The company also offered customers in its retail stores the option to order food from its IKEA Restaurants and Cafe consumer foodservice outlets and collect orders via a drive-through service.
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This report originates from Passport, our Self-Service Cafeterias research and analysis database.
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