What’s driving growth and innovation in Australia’s QSR industry?

Emma Pitfield, consulting partner at KPMG shares her thoughts on the evolving landscape.

Competition in value is driving growth and innovation in the QSR industry as brands continue to double down on new store formats and loyalty apps in a bid to capture more consumer attention.

“Customers are seeking value – both quality and price. This is across all demographics. With the cost of living pressures, there has been a decline in the breakfast and lunch day part, with consumers shifting to more food prepared at home,” Emma Pitfield, a consulting partner at KPMG told QSR Media.

Emma said these can be seen through how QSRs have started building smaller dining rooms and eat-in facilities, focusing their efforts on drive-thrus as delivery remains flat due to consumers tightening their spending and not wanting to pay delivery fees.

Examples are brands like Zarraffa’s Coffee and Grill’d who previously announced that drive-thrus will be a focus and San Churro’s Clasico store format.

Heating competition

Innovation has also been jumpstarted as more international fast-food brands announced their intentions to enter Australia.

Last year, Wendy’s announced its intention to build 200 restaurants in Australia. Chicken chain Popeyes also said that Australia is a ‘significant potential market’ for them, following its debut in New Zealand.

But what does this mean in the competition for consumer attention?

“Whilst currently, consumers are potentially prioritising value given the current economic environment, consumers also are looking for innovations that make their experience unique and drive a source of value to them,” Emma said. She added that technology provides a great opportunity to bring together a tailored offering or experience without putting too much impact on operations.

For example, the majority of transactions in QSR are now digital transactions. This is mostly due to  QSR’s incentivising customers to use their apps to capture customer data, optimise labour and increase the average order value.

“App-based loyalty programs are replacing the old punch card loyalty programs Digital screens and in-store advertising enable dynamic changes in the menu for weather, daypart and local consumer relevance. Children’s play in store has become more digitally enabled - both with meal toy offers and digital play. Meanwhile, global QSR is leveraging more aggressively common back-of-house solutions and technology to drive productivity and efficiencies,” Emma said.

Strategies to drive value

Emma said there are several ways QSRs can do to enhance value and attract consumers.

First, they must ensure that there are diverse offerings that support consumers at a range of price points. QSRs with price increases so that it doesn’t go too far.

“Ensure operational effectiveness by looking for ways to reduce complexity – focus on ensuring that your product offerings can be produced at a high quality consistently,” Emma said.

Additionally, QSRs must adopt enabling technologies where it makes sense to improve the customer experience and operational efficiency.

For marketing, QSRs should consider deliberate event alignment which aligns with their brand.

“This might be a particular festival, charity event, or movie release whereby have the opportunity to deliver something new. QSRs have historically been able to leverage these to bring a further emotional connection to their brands and drive unity with their employees. Most importantly, you need to listen to consumers and be consumer-led in proposed changes and capturing opportunities,” Emma said.

“Innovations that deliver more consumer convenience or save time in areas that are recognised and appreciated by consumers will be rewarded with consumer loyalty. Innovation will be critical to achieve ESG goals and brand expectations We see innovation – particularly in the Asia region as an exemplar of what is happening in other regions that may have relevance in Australia.

Emma will join the upcoming QSR Media Conference & Awards 2024 powered by Redbull on 23 September at the Hilton Sydney Hotel, in Sydney, Australia as a speaker. She will talk about the potential of AI in the QSR industry and what brand leaders should do to get the groundwork ready.

Click this link for more information.