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KFC Indonesia's Financial Woes, Forcing 47 Outlet Closures

Updated: Nov 22

● KFC Indonesia Shutters 47 Outlets Amid Rising Losses and Economic Struggles

● Staff Cuts and Store Closures Reflect KFC Indonesia’s Response to Financial Pressures


By Fayza Nawra Avanitanya, Muthia Noor Safitri, Kenzie Aryasatya, Imam Fakhri Prayogo Harianto

November 15, 2024 at 16:30 GMT+7


PT Fast Food Indonesia (FAST), the company managing KFC Indonesia, reported losses amounting to Rp555.08 billion in the third quarter of 2024. The loss nearly tripled compared to Q3 2023, marking a 266% increase. FAST attributed the significant downturn to two main factors: the lingering impact of Covid-19 and boycotts related to the Middle East crisis. The management noted that declining consumer spending has slowed their recovery efforts, while the boycotts have further strained revenue.



However, the company emphasized its continued support for government policies related to the Middle Eastern conflict. According to the financial report, these challenges have adversely affected the group's performance, with FAST’s assets decreasing from Rp3.91 trillion in December 2023 to Rp3.82 trillion in September 2024.


KFC Indonesia cashier | Source: Tempo


In Q3 2024, KFC Indonesia experienced a significant increase in losses, rising by 266.59% year-on-year compared to Q3 2023, when losses stood at Rp152.41 billion. This financial setback has prompted the company to implement efficiency measures to manage its escalating expenses. A key step in this initiative is the closure of several outlets as part of a cost-cutting strategy aimed at addressing these growing losses. This decision reflects the company’s efforts to streamline operations and reduce costs in response to challenging financial conditions.



The closure of outlets is intended to help stabilize the business by focusing resources on maintaining operational efficiency and financial stability. Through these measures, KFC Indonesia aims to minimize further financial strain as it navigates a challenging market environment and works to address the substantial losses incurred.


KFC Indonesia outlet in Surabaya | Source: IDN Times


As part of its efficiency measures, KFC Indonesia reduced its operational outlets to 715 by the end of September 2024, a notable decrease from 762 outlets at the close of 2023. This reduction, marked by the closure of 47 locations, underscores the chain's struggle to navigate the current economic climate. In addition to the outlet closures, the company implemented workforce reductions, cutting 2,274 employees from its staff, resulting in a decline from 15,989 employees in December 2023 to 13,715.o



These adjustments highlight the severe financial challenges KFC Indonesia is facing. This financial strain reflects broader market difficulties, including lingering recovery from the COVID-19 pandemic and ongoing global instability. KFC’s actions exemplify the significant adaptations companies must make in response to prolonged economic pressures.


 

Sources:

CNBC

CNN

The Economic Times


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