Malaysia’s foodservice profit sector will grow at a compound annual growth rate (CAGR) of 8.9% from MYR62.9 billion ($15.2 billion) in 2021 to MYR96.1 billion ($23.5 billion) in 2026, driven by a rebound in consumer confidence, estimates GlobalData, a leading data and analytics company.

GlobalData’s report, “Malaysia Foodservice Market Size and Trends by Profit and Cost Sector Channels, Consumers, Locations, Key Players, and Forecast, 2021-2026,” reveals that the profit sector revenue registered a negative CAGR of 4.4% in the period 2016–21, due to a decrease in the number of transactions and the number of outlets.

Biswarup Bose, Consumer Analyst at GlobalData, comments: “The outbreak of the Delta variant of COVID-19 in the second half of 2021 resulted in the implementation of lockdown restrictions on restaurants; reduced tourist footfall; and increased health and safety concerns. Moreover, in 2020, profit sector channels were either operating under restrictions or were closed, leading to decreased dine-in occasions in the sector.”

Full-service restaurant (FSR) remained the largest foodservice profit sector channel in Malaysia in 2021, accounting for 39.8% of the total profit sector revenue. However, the channel declined at a CAGR of 2% during 2016–21. The travel and leisure channels recorded negative CAGRs of 24.2% and 17% during the 2016–21 period, respectively, due to a drop in tourism activities amid periods of lockdown.

Yum! Brands, Inc. was the leading quick service restaurant (QSR) operator in 2021 with 718 outlets. In November 2021, to celebrate the Malaysian Peranakan Heritage and showcase KFC’s commitment towards local heritage, the fast-food operator introduced its limited-edition Ayam Pedas Nyonya to offer a “unique collision” of different local flavors with a KFC twist.

According to GlobalData, all foodservice profit sector channels in Malaysia are expected to experience growth in outlet count during 2021-26, with travel estimated to record the strongest increase in value at a CAGR of 39.5%.

Bose concludes: “Operators’ initiatives to constantly expand their menus to include a wider variety of items will help attract consumers. Additionally, operators need to focus on offering healthy and freshly prepared products as consumers are attracted to healthy and nutritious menu offerings.”