Australians are no longer into fine dining as the cost of living pressure bites. They appear to be turning to fried chicken for a cheaper alternative to eating out.
The Guardian reports that Collins Foods, Australia’s largest KFC franchisee, reported a surprising 6.6% revenue increase for the year, bucking the trend of economic gloom. Shares in Collins Foods surged by 8% following the announcement, defying earlier pessimistic forecasts.
Collins Foods operates 279 KFC outlets and 27 Taco Bell stores across Australia. Interim CEO Kevin Perkins has attributed the success to affordable value for money. KFC’s overall performance surprised predictions earlier this year.
What does this tell us about customers’ spending behavior? Even as some eateries face tough economic pressure, fast food remains resilient.
Analysts are seeing that quick-service restaurants are benefiting from consumers opting for cheaper meals over expensive dining-out experiences.
Australia’s ‘finger-licking’ appetite for KFC
Why are Australians taking a specific interest in fried chicken KFC? The Australian consumer has prioritized their budgets for the longest time since the COVID-19 pandemic.
Earlier this year, Paul Zahra, CEO of the Australian Retailers Association (ARA), detailed how consumers are still looking for ways to save money.
“We’re seeing more and more, particularly for women, that they’re prioritizing [their budgets] by updating their wardrobe by simply buying lipstick or a new scarf rather than full outfits,” explains Zahra.
KFC’s ability to retain its market share demonstrates the brand’s strong customer loyalty. Fast food outlets like KFC are proving resilient, capturing business from higher-priced dining establishments.
Cost of living constraints
Data from the Australian Bureau of Statistics shows a decline in the purchase of fresh produce like fruits and vegetables. Consumers are turning to cheaper, less nutritious options to increase their dollars.
The popularity of fast food purchases like KFC confirms this sentiment. While it might seem as if it’s value for money for now, it’s not yet clear what the impact would be on the population’s general health in the long run.
Business lessons from KFC
For business owners, there are three lessons to learn from Collins Food, including its ability to adapt to a specific demand.
- Customer retention: KFC is expanding its brand popularity by offering loyalty through value for money at a time when customers most need it.
- More affordable options: While KFC has not slashed its prices, it has incorporated more cost-effective options to suit low-income budgets.
- Flexible pricing strategies: Monitoring consumer behavior and adjusting offerings accordingly can keep businesses competitive.
NOW READ: Consumers are under pressure, and retailers feel it too: ARA
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About the author
Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand.
