Jakarta - Bambang Rachmadi, head of McDonald's Indonesia, has a problem on his hands -- for many workers in the crisis-racked country, a single Big Mac hamburger now costs two days' wages.
In less than a year, the price of the famous burger has almost tripled to 10,400 rupiah ($0.70) as the rupiah's collapse sent the cost of imports soaring, while the minimum daily wage for workers in Jakarta currently stands at just 5,750 rupiah.
But Rachmadi says the Indonesian franchise of US giant McDonald's Corp (MCD.N) would ride out the crisis by offering a new range of cheap, locally produced products that could compete with the meals sold by street vendors at roadside stalls.
Rachmadi said sales had not decreased in rupiah terms despite the crisis. "Although the number of transactions has decreased, the unit price has gone up, so the total sales volume remains the same or is even increasing a little," he said.
But the company now has only 80 outlets, 21 fewer than earlier in the year: 15 have been closed due to a dearth of sales, and six more were destroyed when mobs torched shopping malls during the May riots in Jakarta. Rachmadi said that the closures would inevitably lead to a decline in revenue.
"The most important thing is to have sales coming in as much as possible so we can still maintain a little bit of profit, or in stores where this is not possible, positive cash flow," he said.
The core of the firm's survival strategy is the introduction of new, cheap products with a low import content. The first of its crisis-beating products was unveiled this weak -- the "RiceEgg," a single-egg omelet on a cake of rice that costs 2,000 rupiah.
"We have more new products up in our test kitchen and ready to move any time. This will be our answer to the situation -- good nutritious products with quality, but affordable," Rachmadi said.
At the tarpaulin-covered food stalls furnished with simple seating that line Jakarta's streets, a plate of chicken and beef with rice and vegetables costs around 5,000 rupiah. At the simplest stalls where no seating is provided, chicken with an omelet, rice and vegetables sells for about 2,000 rupiah.
In Jakarta, the price of a Big Mac can buy you an eight km (five mile) taxi ride, two cans of locally produced Bintang beer, four kg of good-quality rice or a ticket for the 120 km bus ride to the hill retreat of Bandung.
But Rachmadi said he was confident McDonald's was still competitive.
"The RiceEgg is very popular because it is one of the cheapest products in all Indonesia," he said.
Despite the impact of the crisis, he said McDonald's Indonesia was considering opening more outlets outside Jakarta and re-opening some of the closed Jakarta outlets, although he did not dismiss the possibility of more closures.
"Now we are re-evaluating our strategy. We would like to re-open some... stores, or maybe we will open outside Jakarta, where experience has shown it is more viable," he said.
McDonald's Indonesia falls into the category of companies worst hit by the rupiah's plunge -- firms with a large portion of their costs in foreign currency but with revenues in rupiah.
But Rachmadi said the company was able to cope due to agreements with overseas suppliers.
"Fortunately, in the McDonald's system the supplier is a very important part of our system. We have long-term suppliers who are with us," he said, adding suppliers were currently charging just "development prices" -- basic food costs with no extra charges.
Damage to Indonesia's distribution system was not a problem for the firm as it had its own exclusive distributor which was still operating, he said.
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