Consumer spending around Australia is at its lowest point since 2000, but two products which are seemingly immune to cost-of-living pressures are fried chicken and pizza according to Restaurant Brands (ASX: RBD) and sales from their KFC, Pizza Hut, Carl’s Jr and Taco Bell stores.
For the quarter ended 31 March 2024, Restaurant Brands reported NZD $333 million which represented a 7.9% increase on the previous corresponding quarter.
It comes in the backdrop of new data released by the Australian Bureau of Statistics (ABS) that showed retail spending fell by 0.4% in March 2024, taking spending growth over the past 12 months to just 0.8% as household discretionary spending seemingly dried up.
Despite this, Restaurant Brands’ Australian operations saw a 1.4% increase in sales.
As per the ABS data, Australians pulled back in every retail category except for food, which for their reporting purposes includes both takeaway and groceries which was up 0.9% – still not as much as Restaurant Brands’ fast food.
Despite these little wins by the chain operator, the slowing sales growth in Australia is reflective of the tougher trading conditions amid macroeconomic headwinds, which aren’t impacting business as much in New Zealand and Hawaii (Restaurant Brands’ other major territories), with 149 and 70 stores respectively.
In New Zealand, March quarter sales were up 15.2% while Hawaii delivered a 5.6% increase on the previous corresponding period.
Across the entire network of 378 stores throughout Australia, New Zealand and the United States, same store sales grew 7.9% where new product initiatives across the Taco Bell franchise was cited as a winning ingredient.
The Company remains focused on driving improved margins and increased profit levels while continuing to leverage the household names of its brand portfolio.
These efforts will be supported by ongoing strategic pricing and cost control programs across all markets. Further investments will also be made into technology, product innovation, network expansion and brand experience
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, bloodstock enthusiast and former Analyst.
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