Who doesn’t love a tasty burger? Certainly the average Australian continues to enjoy tucking into a meaty delight at their local fast food outlet.
But nothing stays constant, and the burger business – like other takeaway items – has to adapt to a changing environment.
Here’s what the IbisWorld report outlines for the marketplace:
1. What’s the economic outlook?
Consumer confidence boosts the market and it is expected to rise in 2015-16.
2. Who is the target market?
- Younger customers (24.5 percent aged under 24). The ageing demographic will have a negative impact.
- Time poor customers.
- A decline in average weekly hours is predicted from 2015-16.
3. How do fast food burger franchisees make money?
The sales of discretionary meal options.
Higher profits from better operational efficiency, and reducing costs – including an increase in casual staff to better reflect peaks and troughs in trading times, portion control and minimised wastage.
Premium brands compete on the quality of their products.
4. Who is the competition?
- Sandwich and salad outlets
- Cafes and coffee shops
- Food trucks
5. What’s the outlook?
Modest growth with an annualised 0.9 percent predicted through to 2020-21. Discretionary income is set to increase and this will support the market.
Busier consumers will turn to fast food outlets for convenient meals. Burger shops will need to look to their image to capture a greater share of the customer’s spend as independent and niche operators lead the charge, boosting the number of fast food outlets.
6. What are the opportunities for revenue growth?
Menu options need to reflect consumer preferences for healthier, premium and fresh products.
The onslaught of social media and consumers posting images of food and restaurants means there needs to be a greater focus on premium menu items.
7. What’s on the menu?
- Burgers remain dominant but this segment has declined: 51.1 percent
- Breakfast items are down: 12.4 percent
- Drinks are increasing: 10.8 percent
- Sides remained steady: 8 percent
- Wraps, salads, desserts etc are on the up: 17.7 percent
8. How much is spent on wages?
For every dollar spent on capital costs, $11.93 is paid out in wages. Staff salaries account for the second-largest share of industry revenue: staff are required for customer service, order processing, food preparation and cleaning. Wages have declined over the last five years as franchisees employ more casual staff.
9. What’s shaping the industry now?
There are three distinct trends:
- Cuisine diversity
- Healthier eating
- Premium products
Source: IbisWorld Industry Report Fast Food Burger Shops in Australia, September 2015