Eating out? Wait a minute, it's crisis time<\/p>\n
By Rita A. Widiadana<\/p>\n
JAKARTA (JP): The clock strikes 12 noon. Time for lunch.
\nHundreds of workers, housewives and their children flock to
\nfamily restaurants in the city's malls or to more sophisticated
\ncafes in the basements of office buildings and hotels.<\/p>\n
When they get there they are spoiled for choice. Menus are
\ndiverse, ranging from local dishes and Japanese and Korean
\nspecialties to fast food like pizza, fried chicken and cheese
\nburgers, and food is available everywhere.<\/p>\n
That was the daily lunch time scene before Indonesia was hit
\nby the economic crisis.<\/p>\n
Eating out became part of the lives of many affluent people in
\nJakarta and other big cities in Indonesia during the boom times
\nwhich began in the early l980s.<\/p>\n
McDonald's, Pizza Hut, Sizzlers, Kentucky Fried Chicken and
\nHoka Hoka Bentos among are among a myriad of fast food
\nrestaurants that have become household names in the country.<\/p>\n
Indonesia is now going through an unprecedented economic
\nslowdown and the lifestyles of many people have changed in a
\ndrastic way.<\/p>\n
For many people these changes mean that they come straight
\nhome from work and spend more time with their families. No more
\nlavish lunches or dinners.<\/p>\n
\"Since the economic crisis began, I've rarely taken my family
\nout for lunch or dinner. Under the present circumstances it is
\nnot wise to spend extra money on food because the situation could
\nget even worse,\" said Djoko, a bank executive.<\/p>\n
Nadia, 25, an employee at a foreign oil company, shared
\nDjoko's sentiment. \"Now I have to think twice before entering a
\nrestaurant. I bring a lunch box to work every day, something that
\nI would not have done a few months ago,\" commented Nadia, who
\nearns around Rp 3 million a month.<\/p>\n
With the sharp fall in people's purchasing power and changes
\nin consumer behavior, the restaurant business is being forced to
\nswallow a bitter pill.<\/p>\n
Bambang N. Rachmadi, president of McDonald's Indonesia,
\nadmitted that the restaurant business is facing a difficult time
\nafter the rosy days of the last ten years.<\/p>\n
\"We understand that some of our faithful customers are no
\nlonger able to buy our products,\" said Bambang.<\/p>\n
When the crisis started in July l997, economists predicted
\nthat businesses would face severe difficulty when the rupiah hit
\nRp 6,000 against the U.S. dollar, he said. Now the rupiah is
\nstanding between Rp 12,000 and Rp 13,000 against the dollar.<\/p>\n
\"The rupiah's depreciation against the U.S. dollar has been
\nridiculous, not to mention the high bank interest rates and
\ninflation. It is hard for any businessman to endure these
\ncircumstances, \" he complained.<\/p>\n
It is just a matter of time before businesses start to \"die\"
\none by one unless the government takes bold and swift action to
\nstart an economic recovery.<\/p>\n
\"In this critical period, people, with only a few exceptions,
\nare likely to stop eating out,\" he said.<\/p>\n
McDonald's, he said, must make an all-out effort to capture a
\nshare of this very thin market.<\/p>\n
One way it has attempted to do so is with the launch of the
\nRiceEgg, in addition to its value for money Paket Hemat (meal)
\npackages.<\/p>\n
A RiceEgg consists of rice and a egg, with some vegetables and
\nshreds of meat which sells for Rp 2,000.<\/p>\n
Rice is the staple food for most Indonesian people and egg is
\nhigh in protein, nutritious and still affordable, Bambang said.<\/p>\n
\"It is very inexpensive and we take a small profit margin from
\nthis product,\" Bambang claimed. \"You can compare our price with
\nthe price of rice in other family restaurants which is about Rp
\n1,000 to Rp 2,000 a cup,\" he added.<\/p>\n
The price of other McDonald's products have increased by an
\naverage of 10 percent to 15 percent because of the soaring price
\nof ingredients.<\/p>\n
In recent years McDonald's 80 percent of the ingredients in
\nits products have been local produce. However, many of the local
\nsuppliers have gone bankrupt because of the economic crisis and
\nso the imported content of the food on sale has risen. This, he
\nsaid, would affect the companies production costs and filter
\nthrough to selling prices.<\/p>\n
\"A lot of businesses have already collapsed. We are now
\nentering a survival period which I think we will come out of by
\nthe year 2,000 at the earliest,\" Bambang said.<\/p>\n
Until such time as a recovery begins the company must cut its
\nprofit to the minimum, slash overheads and production costs and,
\nif necessary, close unprofitable outlets and reduce its
\nworkforce.<\/p>\n
Bambang said that business flourished up until the early part
\nof l997. \"We had plans to open a large number of outlets in
\nseveral cities but at that time nobody expected we would face the
\neconomic crisis,\" Bambang recalled.<\/p>\n
The company decided to press ahead with the plan in which it
\nhad already invested considerable sums of money. \"It was only a
\nfew months later that rioting and the worsening social, economic
\nand political condition forced us to shut some of our outlets,\"
\nhe said.<\/p>\n
McDonald's operates 14 major outlets in Greater Jakarta, some
\nof which are open 24 hours a day. Outlets can also be found in
\nDenpasar in Bali; and Surabaya, Cirebon, Yogyakarta and Bandung
\non the island of Java.<\/p>\n
The closure of certain outlets is part of the company's
\nsurvival strategy, which also includes sharp cuts in its
\nworkforce.<\/p>\n
\"It is hard for us to do this. But we offer them (those laid
\noff) the chance to work at McDonald's restaurants in Kuwait, Oman
\nand other Middle Eastern countries,\" Bambang explained.<\/p>\n
Demand for McDonald's Indonesia workers has been high in some
\nMiddle Eastern countries in recent years. The workers are offered
\na monthly salary of around US$300 (Rp 4,050,000).<\/p>\n
At one time the amount was considered so small by our workers
\nthat nobody was interested in taking up the offer, Bambang said.<\/p>\n
Although facing difficult times, Bambang was upbeat about the
\nlong term prospects for the company and spoke optimistically of
\nhappier times. He added the company were trying hard to consider
\nthe human effects of their retrenchment efforts.<\/p>\n
\"We will do our best to maintain our good relationship with
\nour employees and our customers,\" said Bambang.<\/p>\n
However, Bambang's enthusiasm alone may not be enough to keep
\nthe golden arches glittering. If the country's economic and
\nsocial condition continues to deteriorate then few people will be
\nlucky enough to bite into a BigMac, or for that matter a RiceEgg.<\/p>",
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