Growth and Efficiency Trade-Offs: How Brand Strength Optimizes Indonesian F&B Profitability

Ricky (Department of Accounting, Universitas Widya Dharma Pontianak, Indonesia)
Hengky Leon (Department of Accounting, Universitas Widya Dharma Pontianak, Indonesia)
Okevanrianus Putra Hernat (Department of Accounting, Universitas Widya Dharma Pontianak, Indonesia)
Irwin (Department of Accounting, Universitas Widya Dharma Pontianak, Indonesia)
Dedy Haryadi (Department of Accounting, Universitas Widya Dharma Pontianak, Indonesia)

The Indonesian Accounting Review
Forthcoming Articles

This study examines the determinants of the outlet profitability index (OPI) in Indonesia's food and beverage (F&B) industry by investigating whether business expansion remains the primary driver of outlet profitability. Using a quantitative causal design, the study analyzes secondary data from food and beverage companies listed on the Indonesia Stock Exchange (IDX) through multiple regression and moderated regression analysis (MRA). The results show that operational cost inefficiency and raw material waste have significant negative effects on outlet profitability index, whereas outlet expansion does not significantly affect the outlet profitability index, indicating that business growth does not necessarily improve financial performance. In addition, brand strength does not directly influence outlet profitability but weakens the adverse effect of operational cost inefficiency on outlet profitability. These findings suggest that sustainable outlet profitability depends more on operational discipline and effective resource management than on expansion strategies alone. This study contributes to the literature by proposing an integrated profitability framework that positions operational discipline as the key determinant of sustainable outlet profitability and brand strength as a contingency-based strategic asset.