‘The world has moved away from cheap stuff’: Why Retail Zoo believes there’s big opportunity in affordable indulgence

Chief executive Nishad Alani also talks about customer loyalty investments and long-term views on drive-thru.

Retail Zoo has upped its store opening targets, aiming for at least 50 stores over the course of the year as its chief executive expects record revenues during the second half of FY22.

“Given it's unlikely we're going to go back into lockdowns, we would expect a strong H2 which would get FY22 at a record result for us. Our business is reacting quite well, responding quite well. We were extremely resilient during COVID. We've rebounded really well coming out of COVID, which sets us up quite well for a record result,” Nishad Alani told QSR Media in an exclusive interview.

Boost Juice, the company’s largest brand, will open between 15 to 20 whilst Betty's Burgers will open “probably somewhere between 10 and 15,” the executive said. 

“We won't go crazy. We've got a cycle where we've been doing this for the past five years. So we're gonna just continue to do that,” he said.

Both brands have been enjoying high sales of late, with Alani revealing that Boost and Betty's raked in over $980,000 and $500,000 in network sales, respectively, during the first Saturday of March. These rates have continued after that weekend. 

“We believe that we fit into this category called affordable indulgence and that is where we think there is a big opportunity right now,” he explained. 

“We're still in a little bit of an uncertain time period, with the [Russia-Ukraine] war and inflation and all that. So sitting in a bucket of — call it fast casual or casual dining — is really strong and within this space, most importantly, we are very well competitively priced.”

“I think the world has moved away from cheap stuff like a Slurpee or $1 coffee or beer or Coca Cola to something a little bit more personalized, a little bit more indulgent, but still affordable,” he added.

Further investments in customer loyalty, personal promos
Whilst able to avoid major supply chain and staffing challenges, Retail Zoo is also making “bigger investments” related to customer loyalty, citing an aim to understand pricing in particular.

“There's a lot happening around loyalty and frequency of visits and data warehousing…that level of analytics is where the biggest investments are happening,” he said.

“We're getting to a point now where we're going to understand our customers, who actually is only coming to Betty’s because they're getting a promotion and how do we personalize that promotion for them…We're trying to get a better sense of what to discount, who to discount it to and when to discount it.”

Betty’s place in the burger segment
It’s “happy days” for Betty’s in particular, Alani said, crediting burgers for reaching a wider spectrum of customers in dining or entertainment precincts vis-a-vis other cuisines. The chain recently launched its first plant-based burger, geared to be relevant to an emerging number of consumers on that diet.

“Who's the only real competitor? Maybe Grill’d? All the other burger places are relatively small,” he said, referring to the segment. “There's a lot of burger places that are just a lot of hype and people think it's really competitive.”

Long-term drive-thru plans
Over the long-term, Alani envisions the portfolio to increase its drive-thru presence but clarified that the company is not in a hurry to do so.

“We're only [have] one drive-thru right now with Boost we want to get into more drive-thrus; that's going exceptionally well. And then with Betty's Burgers, we're looking at drive-thru but it's probably still a little bit early in our maturation,” he said.

“When we get to 100 stores or 80 stores, then I think drive-thru is probably something we will look at. We don't want to destroy the brand. We don't need to go so quickly on this. We've actually done some preliminary analysis and we believe there's [an] opportunity for about 80 stores in that space.”

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