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Pizza chains fight for slices of RI market
The clock has yet to strike 12 midday but office workers in pressed shirts, young children in school uniforms and teenagers in jeans are already seated inside the restaurant, flipping through menus of assorted pizzas
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he clock has yet to strike 12 midday but office workers in pressed shirts, young children in school uniforms and teenagers in jeans are already seated inside the restaurant, flipping through menus of assorted pizzas.
'I have never seen a market whose segment includes young and old alike,' Pizza Hut Indonesia president director Stephen McCarthy said as he looked around the restaurant.
Pizza Hut Indonesia, he added, was unique compared to the rest of its global franchises for the rich variety of new items introduced onto the menu every year.
'We introduced around 22 new products in 2013, and customers will see about 28 new products this year,' he said.
He added that Pizza Hut, which was the first to introduce crusts filled with cheese, had not only launched new pizza items but also rice dishes.
'We want to be known for our pizza and more. Not every Indonesian likes to eat pizza or Western food, so the rice dishes are targeting these customers,' he added.
Pizza chains such as Pizza Hut are indeed finding the Indonesian market appetizing. Those in the middle class ' a burgeoning income segment ' have developed a taste for foreign food and these pizza chains have become increasingly popular.
PT Bain Indonesia partner Nader Stefano Elkhweet recently pointed out that Indonesia was the second-largest pizza market in Southeast Asia after Malaysia.
'The Indonesian pizza market is worth between US$400 million and $450 million in retail sales for large and medium chains,' he told The Jakarta Post.
'The market has been growing relatively fast at an excess of 15 percent in 2011 and 2012,' he said.
He added that 'Indonesia's significant increase in per capita disposable income is encouraging Indonesians to eat Western-style food'.
McCarthy pointed out that the spread of real estate developments into suburban areas provided new markets to tap. The presence of shops in these development areas, he further said, provided facilities for Pizza Hut to set up their operations.
'We can't always be located in malls,' he noted.
However, Elkhweet noted that growth would slow down in 2014 alongside economic contraction.
'But [growth] will still be in the high-single or low-double digits,' he said.
McCarthy added that the Indonesian market was one of the fastest growing worldwide, and Pizza Hut Indonesia aimed to grow by up to 20 percent annually.
He pointed out that this year, Pizza Hut Indonesia aimed to open 25 new 'big box' outlets, or restaurants housing 40 or more tables, after launching 22 new outlets in 2013.
Pizza Hut currently has 295 outlets ' comprising 213 dine-in outlets and 82 specializing in delivery orders, called Pizza Hut Delivery (PHD).
Based on data from Bain Indonesia, there are around 400 medium and large pizza chains in the country, in addition to 300 or so small and independent outlets. Ninety percent of sales come from dine-in establishments, although home delivery is growing fast.
'We usually launch in two to three new cities annually,' McCarthy said.
Besides Pizza Hut Indonesia, the PizzaExpress chain is also getting a good piece of the Indonesian market.
'Year-on-year sales growth is in double digits,' PT Mitra Adiperkasa (MAPI) spokesperson Fetty
Kwartati said.
MAPI is a frachisee of PizzaExpress, which is also known as Pizza Marzano. The retailer's food and beverage portfolio also includes another pizza chain, Domino's Pizza.
Fetty noted that PizzaExpress currently had 11 outlets, which served one-size Italian-crust pizzas.
' JP/Mariel Grazella
