Increasing public concern over health and nutrition over the past decade has revolutionised the range of products offered by many of Australia’s fast-food retailers. Consumers have become increasingly concerned about fat content, fried foods and salt content, which has been reflected in demand for certain types of food.
This has encouraged fast-food operators to expand their menus to include healthier options such as salads, yoghurt and wraps. It has also fuelled competition in the industry due to the entrance of new operators promoting wholesome food, such as Sumo Salad, Boost Juice and Wagamama. This has caused a decline in market share for unhealthier food products such as hamburgers, pies, fish and chips, and pizza, and an increase for healthier food segments such as sandwiches, salads and sushi.
Hamburgers are still king of the industry, accounting for the largest portion of revenue. However, increased competition, more options and increased awareness of healthy eating have caused hamburgers’ share of the market to decline in the past decade. To maintain demand for this segment, burger sellers have expanded their products to include healthier varieties such as grilled chicken burgers, salads, and wraps.
Desserts and confectionery is also a large segment for the industry, despite rising health concerns. Similar to the hamburger segment, it has expanded in the past five years to include healthier options such as yoghurt, fruit and muesli.
Other food segments include Thai, Japanese, Indian, Chinese and Greek cuisines, which have gained popularity due to the shift away from unhealthy burgers, chips and pies and an explosion in the number of providers. Sushi and Thai in particular have become as common as old favourites like fish and chips, and can be found in almost every food court and suburb in Australia.
Other (51%), McDonald’s Australia Ltd (19.5%), Yum! Restaurant Australia Pty Ltd (16.6%), Competitive Foods Australia Pty Ltd (8%), Domino’s Pizza Enterprises Ltd (5%).
Consumer demand for nutritious fast food is expected to provide healthy returns to the industry over the next five years, despite competition from supermarkets and convenience stores. Industry revenue is expected to grow by 2.7% per annum over the next five years, to reach $17.3 billion in 2016-17. Changes in real household disposable income and the age distribution of the population will also drive demand for fast food.
Major supermarket chains will continue to pose a threat to fast-food retailers over the next five years. The development and marketing of prepared meals by leading supermarkets will constrain potential sales of fast food. Although demand will largely be driven by healthy food options, traditional favourites such as frozen pizza will continue to fill the shopping trolleys of time-poor consumers. Convenience stores are also expected to account for a larger share of the fast-food pie as they expand their range of food-service items.
Changes in consumption expenditure will affect convenience stores and milk bars. However, growth in the industry will be constrained by the increasingly competitive environment in which the industry operates. This will occur primarily from the establishment of convenience stores and the anticipated deregulation of shop trading hours in most states over the next five years. The deregulation of shop trading hours will result in increased competition from supermarkets. The expansion of product range from convenience stores in particular will affect the industry’s market share and revenue.
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