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Jakarta Post

Major restaurants temporarily close as COVID-19 outbreak worsens

  • News Desk

    The Jakarta Post

Jakarta   /   Thu, March 26, 2020   /   03:12 pm
Major restaurants temporarily close as COVID-19 outbreak worsens The COVID-19 threat has compelled several malls in Bandung, West Java, to temporarily shut down, except for several shops that offer basic needs as well as ATM centers. (Shutterstock/GOLFX)

Indonesia’s major restaurant chains are struggling to keep business going as customers stay at home to comply with  restrictions on social life imposed by the government to contain the spread of the novel coronavirus.

Some outlets have temporarily shut down, while others look to online platforms to maintain their business.

Ismaya Group, which runs more than 20 restaurant brands with more than 60 outlets in Indonesia, announced on Monday that it was temporarily closing all of its establishments starting on Tuesday.

The group, which operates a number of foreign restaurant brands in the country’s major cities, such as Djournal Coffee, Kitchenette and Sushigroove, is prioritizing the health and safety of its employees and customers amid the COVID-19 pandemic.

“We believe that as a company and as individuals, we all share the responsibility in fighting this pandemic together. For this reason, we fully support the local government’s recommendations of closing down all restaurants, bars and office operations,” Ismaya Group announced on its website.

Malls have seen a steep decline in the number of visitors. Indonesian Shopping Center Tenant Association (Hippindo) chairman Budihardjo Iduansjah told kompas.com on March 16 that the number had slumped by up to 50 percent following news reports earlier this month that Indonesians had tested positive for the novel coronavirus. That number further plunged after the government urged people to stay at home to limit the spread of the virus that causes COVID-19

Major restaurant chains are hard hit by the coronavirus outbreak, as more than 70 percent of medium to large-scale restaurants are located in malls and office spaces, according to Indonesia Statistics (BPS) data.

Japanese restaurant chain Sushi Tei, which has 45 outlets nationwide, also temporarily closed some of its outlets just a few days after it launched a special offer to attract customers through its online platform with free delivery services.

From March 21 until March 24, Sushi Tei had offered discounts of up to 20 percent coupled with free delivery for a minimum purchase of Rp 100,000 before tax, for delivery locations within 5 kilometers of a Sushi Tei outlet.

On Tuesday, it announced that it would be closing its outlets from March 25 until April 5, starting with its restaurants in the Greater Jakarta area and followed by outlets in other cities.

“The decision was not easy. However, we believe the soonest we stay inside, the soonest we can get back to normal routine,” the announcement on its website says.

Other restaurant chains also offer a free delivery service in order to survive in the current difficult market situation. Restaurants under the Boga Group, which includes Bakerzin, Pepper Lunch, Shaburi and Kintan Buffet, are offering discounts of up to 50 percent with a minimum purchase of Rp 23,000 through their direct delivery services.

Boga Group, which operates more than 150 restaurants across big cities in Indonesia, including Jakarta, Bandung, Surabaya and Yogyakarta, and employs more than 5,000 people, is also working with online delivery platforms to offer dishes at a discount.

Consumers can get up to 40 percent discounts with a maximum of Rp 40,000 cut for a minimum purchase of Rp 80,000 when they order from GrabFood and pay using OVO. With GoFood, consumers can get a Rp 15,000 coupon for a minimum purchase of Rp 60,000.

Restaurants of the Jittlada Group, a Thai restaurant chain, are still open for dine-in but are now offering free delivery services for any orders within walking distance of its restaurants, without any minimum order. It owns outlets in The Breeze, Grand Indonesia, Lotte Shopping Avenue, Senayan City and Pondok Indah II.

The restaurant industry contributes greatly to business activity in Indonesia, as consumer spending is the backbone of the domestic economy.

According to a 2016 Nielsen report on dining-out trends around the world, 11 percent of Indonesians eat away from home once a day or more frequently, higher than the global average of 9 percent, which highlights that “eating out isn’t just for special occasions; it’s a way of life”.

With declining visitor numbers due to the pandemic, layoffs can be a real threat to thousands of workers on the restaurant business. BPS reported that, on average, a restaurant in Indonesia employs 21 people, around 54 percent of whom work as waiters and waitresses. The numbers indicate that, as a labor-intensive industry, many people will be out of work as restaurants close or scale down operations.

The report also stated that in 2017, only about 15 percent of portions ordered by customers were purchased through online services.

However, there is a cause for hope, as recent developments have seen the business of takeouts growing, assisted by on-demand services like GoFood and GrabFood.

Based on data provided by the company, GoFood has seen its transactions increase 30-fold over the past four years and averaged 50 million orders per month at the end of 2019. In the fourth quarter of 2019, more than 20 million customers in Indonesia used GoFood, marking a twofold increase from the same period in 2018. (ydp)