Jakarta, Indonesia Sentinel — The financial losses of PT Sarimelati Kencana Tbk., the Indonesian retailer operating the Pizza Hut brand, deepened by the end of the third quarter of 2024. The company reported a net loss of Rp97.7 billion. This represents a staggering 148.5% increase compared to the same period in 2023, when losses stood at Rp38.9 billion.
According to a financial report highlighted by CNBC Indonesia, the escalating losses are primarily attributed to a sharp decline in net sales. By September 2024, sales had dropped by 24.7% year-over-year, falling to Rp2.07 trillion from Rp2.75 trillion in September 2023.
The company’s total assets also saw a decline, dropping from Rp2.34 trillion at the end of December 2023 to Rp2.16 trillion by September 2024.
Notably, the number of Pizza Hut outlets in Indonesia has decreased by 20 over the past nine months, bringing the total count down to 595 from 615 at the end of the previous year. This contraction has been accompanied by a reduction in the workforce, with the number of employees shrinking by 371 to a total of 4,651 from 5,022.
Impact of Boycott Movement on Sales Performance
The management of PT Sarimelati Kencana has pointed to an expanding boycott movement as a key factor impacting store traffic and overall sales. Since the first quarter of 2024, numerous Pizza Hut outlets, including those in Jakarta—historically the company’s highest-performing region—have experienced notable drops in revenue. Similarly, West Java, which contributes 29.29% of Pizza Hut’s nationwide sales, has also seen sales decline.
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Boy Ardhitya Lukito, Director of PT Sarimelati Kencana, acknowledged the boycott’s adverse effects on the company’s performance. “The boycott has impacted not just Pizza Hut but the entire food and beverage sector, along with other foreign brands within the fast-moving consumer goods industry,” said Lukito.
This downturn reflects broader challenges faced by international food and beverage franchises operating in Indonesia amid rising consumer activism.
In July 2024, PT MAP Boga Adiperkasa Tbk., the franchise holder of Starbucks, also announced the resignation of one of its commissioners amidst similar boycott-related controversies tied to products associated with Israel.
Anthony Cottan, the president director of the parent company Mitra Adiperkasa Group, had resigned earlier, signaling potential internal and external pressures.
PT MAP Boga Adiperkasa is a prominent player in Indonesia’s food and beverage market, operating numerous international brands that populate the country’s shopping centers. These include Starbucks, Burger King, Pizza Express, Krispy Kreme, Cold Stone Creamery, Godiva, and Genki Sushi, among others.
As boycott movements continue to gain traction, the impact on international franchises underscores a shifting landscape in consumer behavior that could reshape the industry in Indonesia.
(Raidi/Agung)
