Jakarta, Indonesia Sentinel — PT Fast Food Indonesia Tbk (FAST), which operates the KFC franchise in Indonesia, has reported a net loss of approximately Rp557 billion ($35.5 million) as of September 2024. The significant financial downturn is attributed to a slow recovery from the COVID-19 pandemic coupled with recent boycott movements, stemming from geopolitical tensions in the Middle East.
These issues have placed significant pressure on the company’s performance, reducing sales volumes and forcing difficult decisions, including the closure of several outlets. As of September, FAST operates 715 KFC locations across Indonesia, down from 762 at the end of 2023, reflecting 47 closures within the past year. The store closures have affected a number of long-standing employees who rely on the franchise for their livelihoods.
In terms of financial impact, FAST’s revenue in the first nine months of 2024 dropped by 22.2% compared to the same period last year. Revenue for the period reached Rp3.59 trillion ($229 million), down from Rp4.62 trillion ($295 million) in 2023. Management attributes these losses to continued low demand as well as the boycott movement targeting brands perceived to be linked to Western policies in the Middle East.
The ongoing conflict has sparked consumer backlash, resulting in boycotts of prominent American-based brands, including KFC, Starbucks, Pizza Hut, and McDonald’s, across Indonesia. This local movement has taken its toll on KFC’s sales, exacerbating the challenges faced since the pandemic’s onset.
In an effort to manage the fallout, FAST has publicly reiterated its alignment with Indonesia’s official policies on the Middle East conflict, hoping to reassure local consumers of its support for the government’s stance.
McDonald’s Brings Back Burger Linked to Deadly Incident
To address its financial difficulties, FAST is also exploring several internal strategies aimed at stabilizing its operations and reducing overhead. Currently, liabilities have risen from Rp3.19 trillion ($203 million) in December 2023 to Rp3.56 trillion ($227 million) as of September 2024, while total equity has dropped significantly from Rp723.88 billion ($46 million) to Rp262.18 billion ($17 million) over the same period.
FAST’s management remains cautiously optimistic, despite the immediate challenges, and is hopeful that strategic adjustments will help bolster the company’s position. They have emphasized their commitment to sustaining the brand’s presence in Indonesia and addressing consumer concerns in the months to come.
(Becky)
