Malaysia’s foodservice profit sector is forecast to recover strongly and grow from RM64.9bn (US$16 bn) in 2020 to RM109.08bn (US$27.08bn) in 2025 at a compound annual growth rate (CAGR) of 10.9%, says GlobalData, a leading data and analytics company.

The industry growth is expected to recover with an increasing number of transactions as the economy recovers from the COVID-19 pandemic. Increasing takeaways and the rising demand for dining out will drive the profit sector growth in Malaysia in coming years.

GlobalData’s report, ‘Malaysia – The Future of Foodservice to 2025’, reveals that with a 36.6% share, the full-service restaurant (FSR) channel remained the largest foodservice profit sector channel. The channel is forecast to record a strong growth at a CAGR of 11.5%. The FSR channel’s sales will benefit from the growing consumer preference for home deliveries and takeaways.

The quick service restaurant (QSR) channel recorded the slowest decline among all the foodservice channels during 2015–2020 at a CAGR of just 0.05% as it provides value for money products. In terms of outlets, QSR was the only channel that registered growth by a CAGR of 0.1% during the review period, on the back of expansion plans of leading players.

Bijayalaxmee Pradhan, Consumer Analyst at GlobalData, says: “Malaysia’s foodservice profit sector registered sales decline mainly due to fall in number of transactions across all channels, except QSR and FSR. However, the pandemic and restrictions on movement accelerated growth in food ordering through online platforms in order to avoid visiting public places.”

GlobalData forecasts that the FSR channel will continue to lead the profit sector in the post-pandemic period. The channel is expected to record a transaction growth of 5.9% during 2020–2025. Travel and ice cream parlor channels are expected to grow strongly in the next five years as pandemic-related travel restrictions gradually ease.

Ms Pradhan concludes: “Operators need to innovate the menu options by following food trends such as plant-based, meat-free options to stay relevant among the consumers. Further, technology can be utilized to get closer to consumers with concepts such as contactless ordering and payments.

“FSR operators will focus on improving the convenience factor in their operations in the future by including takeaway and home delivery transactions. Also, there will be increased growth in chain operators, reflecting growing consolidation in the foodservice sector.”