Australia’s foodservice landscape shifts as quick-service restaurants gain share

Australia's foodservice sector is back on a growth footing, but the recovery is uneven and the competitive landscape is fundamentally changing. As real incomes stabilise and discretionary spending gradually improves, consumers are returning to eating out - yet they are doing so more often and with a sharper focus on value and convenience. Growth is no longer about a rising tide lifting all boats; it is increasingly about which players win market share, and why.

Foodservice remains a strategically important channel for Australian agricultural producers and food manufacturers, absorbing significant volumes of animal protein, dairy, and fresh produce. This channel enables manufacturers to diversify away from highly competitive grocery retail channels and volatile export markets.

However, the path to growth for operators is more demanding than before. The sector is undergoing a clear structural shift. Although independents still dominate by outlet count and remain essential to cuisine diversity, market share is steadily shifting towards fast-casual and quick-service restaurant (QSR) operators. These formats are outperforming on affordability, scale, digital engagement, and operational efficiency - the attributes that matter most to today's consumer. Australia's largest QSR brands have steadily increased their share since 2020, benefitting from dense store networks, strong brand recognition, and disciplined value propositions. This is driving intense competition across formats.

Margins for foodservice operators are showing signs of recovery after several years of pressure. Food cost inflation has eased for many key inputs, and menu price inflation is slowly moderating. Financial stress remains elevated across parts of the sector, with insolvencies still well above long-term averages.

Australia has become a focal point for global foodservice investment. International QSR brands and private equity are betting on population growth, urban expansion, and resilient consumer demand to drive long-term returns. New entrants and aggressive store rollouts by incumbents are intensifying competition for eating occasions, foot traffic, and delivery demand.

Competition for market share increasingly centres on specific eating occasions. Chicken-led menus, cold beverages, snacking, and breakfast are key growth areas, supported by menu innovation and targeted promotions.

For Australian primary producers and food manufacturers, the outlook is nuanced but positive. Foodservice continues to offer attractive, selective growth opportunities - but the sector is becoming more concentrated, competitive, and operationally demanding. Winning in this channel will require investment and sharp decisions about which formats to serve, how to tailor products, and how to meet the scale, consistency, and responsiveness demanded by larger operators, while still servicing a fragmented independent segment.