The Real Reason Australians Are Choosing KFC Over Restaurants
What is so attractive for Australians to jump on fine dining and turn to economical budge food options such as KFC?
When traditional dinings across Australia are scaling back operations, closing early, and finding it difficult to attract customers, KFC Australia is exceeding the market with a whopping profit of 6.6% with their shares growing up by 8%.
The reality is not as simple as you think, the answer involves a combination of economic pressures, changing consumer preferences, and the direction of the hospitality industry in the country in the last few years.
Have you ever thought about how the cost of living crisis is affecting dining choices in Australia?
Let’s break it down. After covid 19 economic conditions lead to cost of living crisis in Australia with heavy interest rates and mortgage payments skyrocketing multiple times in the last few years. Eventually, people started saving for essentials and decided to cut down extra expenses. Therefore, fine dining restaurants are out of the budget. Instead, they wanted to look towards budget friendly options such as KFC.
This marked a vivid difference between the decline of traditional dinings and the rise of economical options such as KFC, it is a proof of how the economy is shaping consumer preferences.
It is interesting to note that the fast-food industry is also not immune to inflation. Major fast food chains have drastically increased their Menu Prices in Australia over the past few years. Despite the price hike, fried chicken is the top choice of diners. Traditional restaurants have higher overhead costs compared to fast-food chains like KFC and McDonald’s due to staff service, premium ingredients and dining ambience, etc. This difference results in rising overall prices of menu items in traditional restaurants.
How is KFC expanding in the Australian Market?
Australia is known as a less saturated market with huge potential for fast food chains like KFC.The main fast food chains opened more than three hundred new stores in Australia previous year. Most of the stores were opened in outer suburban areas, which are considered the heartland of their customer base. Such areas have less competition due to a lack of diverse restaurant choices and a higher presence of younger families that are more like to eat at fast-food restaurants.
This strategic approach is not just limited to expanding geographic presence. The products have been optimised to attract new customers. In a bid to target more diners, such fast-food chains have expanded their menus to accommodate breakfast and snacks, increased the number of drive-thru services, 24-hour operations and partnered with delivery platforms.
How are eating habits changing in Australia?
Research into Australia’s fast-food consumption patterns reveals that 32% of Australians prefer buying meal deals at what seems to be a discounted price rather than buying the items separately. That is why value bundling and meal deals have become a vital part of restaurants’ marketing strategy.
CEO of the Australian Retailers Association (ARA) has also pointed to changing patterns in customer behaviour over the past few years, especially after COVID-19. Though she was specifically pointing to the fashion industry, the broader pattern is also visible in the dining industry. Consumers are finding ways to eat outside while reducing the financial impact. Impressive growth by KFC during this period is evidence of the deep understanding of market dynamics and customer loyalty.
What makes KFC a comfort food choice?
Behind KFC’s rise in Australia, there is psychology at play, too. In the time period of uncertainty and financial crisis, people often turn to food choices that provide satisfaction; meanwhile, KFC became the most popular choice because of its brand recognition, consistent taste profile, and emotional attachment. Predictability is an important factor to consider in times when uncertainty is ruling everywhere. Predictable and consistent dining experience at KFC makes it a winner.
The story does not end here, rather the cozy dining under economical rates make it ideal for customers to choose fast food options over fine dining.
At the end of the day, it would not be wrong to say that KFC’s previous rise in Australia can be attributed to many factors including the cost living crisis, strategic positioning, and psychological attachement.
