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Wendy’s to Open 200 Stores in Australia: A Deep Dive Into Our Increasing Appetite For Fast Food

Wendy’s to Open 200 Stores in Australia: A Deep Dive Into Our Increasing Appetite For Fast Food

On Thursday, 10th August 2023, Wendy’s announced it will open 200 stores in Australia. The US fast-food group signed a deal with Flynn Restaurant Group, which recently acquired all Australian Pizza Hut locations, to open 200 Wendy’s stores by 2034.

Redefining what Australians should expect from QSR.”

“We think it is an especially great fit for Australia, given the savvy nature of the Australian consumer. We look forward to expanding the brand in the market and, in the process, redefining what Australians should expect from QSR,” said Flynn Restaurant Group CEO Ron Bellamy to News.com.au. 

As one of the USA’s most successful fast-food chains, Wendy’s announcement is big news for Australian QSRs and the hospitality industry as a whole.

Opening 200 restaurants is no mean feat – by comparison, Oporto has 178 stores in Australia. With such lofty ambitions, it’s clear that Wendy’s is confident in Australian consumers and opportunities in the market. 

However, the inflationary pinch is impacting hospitality businesses, and many are wondering what a new, large-scale player in the industry will signal for venues across the country. 

With these concerns in mind, we take a deep dive into Wendy’s plan to enter the market, Australia’s increasing appetite for fast food and takeaway and the potential impact on hospitality businesses. 

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Wendy’s, Australia and the fast food market

With over 7,000 restaurants globally, Wendy’s is the third largest hamburger chain in the world, following Burger King and Mcdonald’s. After opening its doors in 1969, Wendy’s has witnessed incredible growth – expanding to over 30 countries across five continents.

This isn’t Wendy’s first attempt to enter the Australian market. In 1982 Wendy’s opened its first restaurant in Melbourne, growing to 11 stores before closing its doors in 1985.

While the chain’s first attempt to launch in Australia wasn’t a success, the huge achievements of other US fast food brands have highlighted how Australia is a prime market for growth and expansion. 

Unsurprisingly, Wendy’s isn’t the first US food chain to break into the Aussie market. Aside from longstanding chains McDonald’s, Hungry Jacks (Burger King) and KFC, several other well-known American brands have found huge success with Australian consumers. 

Dominos, Subway, Pizza Hut, Krispy Kreme and Taco Bell have all made a name for themselves down under, with Cinnabon being the latest import to receive a warm, almost cult-like welcome. After launching Melbourne in 2019 and Sydney in January 2023, Cinnabon witnessed hour-long queues for days on end, resulting in order limits being enforced due to high demand.  

Despite being 18 months away, chatter in the market for Wendy’s launch is already growing, suggesting consumers may give the restaurant chain a similar welcome as its predecessors. 

An increasing appetite for fast food and takeaway

Australia’s appetite for takeaway and fast food has steadily grown over recent years, and consumer tastes aren’t just limited to American brands.

Aussie burger chain Grill’d opened its doors in Melbourne in 2004 and has grown to over 150 locations nationwide. Similarly, Guzman Y Gomez opened in Sydney in 2006 and now has over 140 restaurants across Australia and 16 international locations.

It’s not just the rise in QSR locations that point to Australia’s love affair with fast food and takeaway.

According to recent research from Roy Morgan, 15.9 million (75%) Australians ate takeaway food in an average four-week period from fast food outlets such as McDonald’s, KFC, and Hungry Jack’s or from local venues like fish and chips shops or pizza restaurants.

This is up from 13.3 million Aussies consuming takeaway in 2019 – an increase of 15%.

A booming market

According to Ibis World, the Australian fast food and takeaway food services industry increased by 7.6% in 2022. With this in mind, it’s unsurprising that Wendy’s is eyeing a slice of Australia’s fast food pie. Plus, the $17 billion industry sees 4.5 million transactions daily, with each Australian consuming takeaway a whopping 65 times a year on average.

KFC Australia recently announced an annual revenue surge of 10% and reported surpassing $1b in revenue for the first time while laying out plans to open 12 more restaurants in 2024.

It’s a similar story for McDonald’s, which recently announced record profitability with seven consecutive years of sales growth, making Australia one of the brand’s strongest-performing markets.

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The impact of inflation: Aussies consume more takeaway than US, UK and France

Inflation and the cost of living crisis are impacting consumers, and many everyday Aussies are cutting back on discretionary spending.

However, despite the cost of living pressures, Aussies are staying true to their love of fast food and purchasing takeaway up to three times a week, according to research from Deliverect.

The Wendy’s team have a firm finger on the pulse of Aussie consumers, as Deliverect’s research found that Australians are now eating more takeaway food than they were before inflation, and we’re consuming more takeout than people in the US, UK and France. 

Pre-inflation, 56% of Aussies ordered takeaway up to three times a week. According to Deliverect, this has now jumped to 60% of Australians, which is also more than the international average of 57%.

“The research findings may be surprising to some,” commented Deliverect chief executive and founder Zhong Xu, “but evidently, people are continuing to prioritise and enjoy the convenience of takeaway and food delivery.’’

From the research, it’s clear that consumers are favouring takeaway rather than cutting back and, instead, are reducing spending in other areas.

According to Deliverect:

  • 56% of Australian consumers said they would stop going out for dinner and drinks
  • 52% said they would stop purchasing new clothes
  • 45% said they’d give up spending money on travel

What does this mean for hospitality businesses?

While Australians may be cutting back on dining and drinking out, there is an increased appetite for quick, convenient takeaway meals. Wendy’s move to enter the Aussie industry shows they’re confident in the strength and growth potential of the market – and this is where hospitality businesses can also capitalise. 

Whether that’s introducing takeaway to your offering, sprucing up your takeout menu or offering food for delivery – there are several ways your venue can cater to the increasing demand for takeaway food.

Embrace takeaway and delivery

During the pandemic, demand for takeaway and delivery food skyrocketed, and its popularity has only increased in the last 12 months. 

According to Statista, in 2022, 3.2 million Australians used a third-party platform, like Uber Eats, to order food for delivery. By the end of this year, it’s predicted to jump to 3.6 million, an increase of 12.5%.

By comparison, 5 million Australians went directly to a restaurant for online delivery in 2022. This is projected to increase to 5.7 million people by the end of 2023, an increase of 14% – emphasising how more and more customers are willing to cut out the middleman and go direct to restaurants for their takeaway fix. Not only does this allow your business to keep more profits, but it also affords you more control over the end-to-end experience. 

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What’s next?

As the last few years have taught us, predicting what’s around the corner is challenging. While there’s no way to know exactly what’s in store for Wendy’s – we do know that (despite inflationary pressures) Aussies are still regularly eating takeaway, and these purchasing habits don’t appear to be slowing down. 

For the near future, customer demand remains strong for quick, convenient takeaway food options, and many consumers opt to order food straight from the restaurant – a promising change in behaviour for business owners.

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