Australian Fast Food Chains Shift to Chicken as Costs Soar, August 22

Australia’s fast food industry is undergoing a structural shift from beef to chicken, driven by cost-of-living pressures and changing consumer preferences. Chicken QSR sales are forecast to reach $4 billion by 2032. Meanwhile, chains are raising menu prices for all customers to cover delivery app commissions ranging from 15% to 35%, forcing dine-in customers to subsidise online orders.

Why chicken is winning the menu wars

Chicken has moved from a secondary option to a core offering across legacy brands. McDonald’s introduced the McCrispy in 2023, Hungry Jacks launched Jack’s Fried Chicken in 2021, and KFC continues expanding burger-led offers with its Big Bro combo featuring two fillets. IBISWorld Industry Analyst Sebastian Quinn told nine.com.au the shift is most evident in burgers. Post-COVID, chicken became a much more affordable protein source for families facing cost-of-living pressures, according to Michael Whitehead, Executive Director of Food, Beverage and Agribusiness Insights at ANZ.

Delivery apps are squeezing restaurant margins

Fast food chains are inflating entire menus to fund higher delivery costs, according to a PRD real estate group review. Commission fees from apps range from 15% to 35% per order. Dine-in customers pay more to subsidise home delivery orders, while also experiencing longer waits and worse service. Specialised packaging with heat retention and tamper-evident seals adds significant costs that venues pass to consumers.

Guzman y Gomez posts loss but signals growth ahead

Guzman y Gomez (ASX: GYG) shares rallied 13% to $27.10 on August 20 despite reporting a $26.7 million statutory net loss for FY26, driven by US restructuring costs now complete. Network sales jumped to $1.38 billion from $1.18 billion, while underlying EBITDA rose to $85 million from $66 million. Founder Steven Marks said network restaurant margins expanded 20 basis points to 20.3% despite keeping menu price growth well below cost growth. RBC Capital Markets rates GYG outperform with a $23 price target.

Restaurant economics remain healthy despite cost squeeze

GYG’s drive-thru network delivered an average restaurant margin of 21.6%, supported by growth in drive-thru average unit volumes to $6.9 million. The company’s restaurant pipeline grew to 117 sites from 108 in February, signalling expansion momentum. GYG guided for mid-single-digit comparable sales growth in FY27, in line with analyst expectations. The company paid a dividend of 48 cents, up from 12.6 cents in FY25.

Final Thoughts

Australian fast food chains are managing cost pressures through menu innovation and price increases, with chicken becoming the dominant protein. Guzman y Gomez’s strong FY27 guidance and margin expansion despite a statutory loss suggest the industry can sustain growth, though dine-in customers continue to bear the cost burden of delivery app economics.

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