Jakarta, CNN Indonesia –
Hundreds to thousands of businesses are under heavy pressure during the pandemic corona virus ‘hit’ the world. No exception to the food business. In fact, the food business is one of the sectors that is projected to be resilient in all conditions.
In fact, not a few food businesses went bankrupt in the middle of a pandemic. One that is attracting public attention is NPC International.
License holder company Pizza Hut and Wendys in the United States (US) filed for bankruptcy. Because the company’s debt swelled up to US $ 1 billion.
NPC international has 1,200 Pizza Hut licenses and 400 Wendys in the United States. The filing of the NPC bankruptcy broke the perception that the food business was immune to the crisis.
Chairman of the Indonesian Franchise and Licensing Association Levita Supit said the challenges facing the franchise businessman (franchise) now is more severe than the 2008 crisis. Concern over the corona virus has kept people from shopping and making the food industry worse.
This worst condition also approached franchise companies that were previously strong in terms of income and growth throughout the world. He explained, in Indonesia the closure of hundreds of KFC outlets that affected nearly 10,000 workers was the most obvious example.
Levita assessed that Large Scale Social Restrictions (PSBB) have eroded daily turnover because restaurants can only serve orders take-away, delivery service online, home delivery, or drive-thru.
“This restriction makes franchising especially food and beverage (food and drink) it was hit compared to the others. “Of course not only KFC, or Pizza HuT, but many have been all-out,” he said when contacted CNNIndonesia.com Friday (3/7).
Not only that, the closure of various franchise restaurants is also influenced by the restrictions and restrictions on mall operations in Jakarta and various regions that implement the PSBB. Moreover, when it does not operate and has income, franchisees must continue to pay rent up to service charge.
According to Levita, conditions in Pizza Hut could also occur in Indonesia if the PSBB continued until the end of the year and the co-19 positive case curve was not sloping.
“The government must also try to think about how to save this food franchise, not only from easing, because people do not necessarily want to come. But there must be relaxation for them (the franchise),” he explained.
Levita is also not sure that this year the food and beverage franchise business can grow higher than the previous year. Last year the franchise business grew around 10 percent.
He saw the demand side is disrupted because people are losing purchasing power and shopping will due to the corona virus. Such conditions will result in termination of employment during a pandemic.
Levita sees this condition can last until the national economic recovery period and ‘forces’ companies to do a lot of efficiency which has an impact on workers’ income.
Bank Indonesia’s consumer survey in April 2020 alone shows expectations of an increase in income in the next 6 months. This is indicated by the income expectation index which decreased from 138.2 in the previous month to 116.1.
The deepest index decline occurred in respondents with expenditure levels of Rp. 2.1 million to Rp. 3 million.
“These data will show what future spending trends will look like and how they affect the durability of the food and beverage franchise business,” Levita said.
On the other hand, Honorary Chairperson of the Indonesian Franchise Association (AFI) Anang Sukandar actually has a different view. He called the franchise of large fast food restaurants in Indonesia still have the ability to survive the crisis due to co-19.
Anang admitted there were indeed many employee cuts and efficiencies at large food franchises in Indonesia. However, he said, this needs to be done as an effort to transform a new business.
In addition, the durability of large franchises such as Mc Donald’s and KFC is also quite large because they have their own loyal customers. According to Anang, it was precisely the local franchise with a capital of under Rp100 million that would be very hard hit.
“Must be distinguished, yes, franchise big with the scale of MSMEs. “MSMEs can fall because the middle to lower consumer segment is hit,” he said.
Anang stressed there are two things that need to be prioritized food and beverage franchises in Indonesia in order to survive in the midst of a pandemic.
First, prepare digital infrastructure so that online services can be boosted higher. Second, do massive promotions with discounts to use influence to hook consumers.
According to him, if the effort is not made, the franchise will be more disadvantaged because the operation is running but the buyer does not return as in normal times.
He referred to Nielsen’s study which said that 67 percent of consumers who intend to visit the mall after the PSBB was loosened would change their shopping behavior.
Before the covid-19 pandemic, the most frequent activities carried out by mall visitors were buying fast food and soft drinks like bubble tea and coffee, or watching a movie in the cinema.
During the PSBB to the phase new normal, It is estimated that consumers visiting the mall will only shop for daily necessities or buy drugs or vitamins. When PSBB is loosened or ends, shopping for daily needs is still the main destination for consumers to the mall.
While coming to a fast food franchise, watching a movie in the cinema and hanging out with friends is not preferred.
“With this pandemic, everything has been hit. Consumers also have changed their behavior, they have to find ways to sell, for example, right now delivery use go-food, use go-jek then also promote it influence artists and others, “he said.
In addition, continued Anang, entrepreneurs need to improve to restore consumer confidence in the midst of the co-19 pandemic. How, by prioritizing health and hygiene factors.
While the franchise is inside the mall, cooperation with the manager is very important. Adaptation with payment without cash, to the application of non-touch technology on doors and equipment in the toilet area is also important to make visitors feel more secure and comfortable.
If this can be done, he predicts that throughout the second half of 2020 the growth of food and beverage franchises can still be maintained at around five percent.
“But for this, like I said, it seems like it can only be done by large franchises. I don’t know what the small ones will be like,” he concluded.
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