Professional Documents
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Sample Report Consumer Foodservice
Sample Report Consumer Foodservice
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CONSUMER FOODSERVICE IN
AUSTRALIA - INDUSTRY OVERVIEW
EXECUTIVE SUMMARY
Taking It Away
While consumers embraced consumer foodservice in 2010, they still prefer to eat in the
comfort of their own home, where they can watch television and do not have to get dressed up.
100% HDTA therefore represented the fastest growing category in consumer foodservice, while
other chains which do offer dine-in options have seen their takeaway component increase in
recent years. As consumer foodservice slowly shifts to being a 24-hour industry, drive-thru
outlets have proven particularly successful.
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“gourmet burgers” during the economic slowdown embrace them to an even greater degree as
the economy recovers.
Current impact
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Outlook
Future impact
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Current impact
Outlook
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Future impact
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Current impact
Outlook
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Future impact
Current impact
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Outlook
Future impact
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Ifood
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Current impact
Outlook
Future impact
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Current impact
Outlook
Future impact
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Current impact
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Outlook
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Future impact
MARKET DATA
Table 1 Units, Transactions and Value Sales in Consumer Foodservice: 2005-2010
Units ('000)
Transactions (mn) Data removed from sample
A$ billion current prices
A$ billion constant
prices
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
% growth
2009/10 2005-10 CAGR 2005/10 TOTAL
Units
Transactions Data removed from sample
Value current prices
Value constant prices
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Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
outlets
Independent Chained Total
Cafés/Bars
100% Home Delivery/Takeaway
Full-Service Restaurants Data removed from sample
Fast Food
Street Stalls/Kiosks
Pizza Consumer Foodservice
Self-Service Cafeterias
Consumer Foodservice
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
% value analysis
Eat in Takeaway Total
% value analysis
Food Drink Total
% value
2005 2006 2007 2008 2009 2010
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Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
% value
Company 2006 2007 2008 2009 2010
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% value
Brand Global Brand Owner 2007 2008 2009 2010
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Units ('000)
Data removed from sample
Transactions (mn)
A$ billion
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
% growth
2010-15 CAGR 2010/15 TOTAL
APPENDIX
The ABS Business Demography figures measures “businesses” not “outlets” per se, so
consequently the figures are significantly lower than Euromonitor’s.
Also those outlets retailing baked goods are excluded from ABS figures, thereby excluding the
bulk of bakery products fast food.
Although this is a comparatively minor issue, the ABS does not include businesses that open
and then quickly close again, within the same financial year. Due to the low start up costs
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associated with establishing some consumer foodservice outlets, this issue is especially
important for this industry. Also a minor issue is the ABS’s exclusion of theatre restaurants.
ABS Retail Trade data, on the other hand, does not include pubs and bars.
No. of outlets
2007 2008 2009
A$ million
2004 2005 2006 2007 2008 2009
Cafes, restaurants
and catering services Data removed from sample
Takeaway foodservice
Total
2010
While Australia does have a variety of associations covering consumer foodservice both
national and state-based – such as the Restaurant & Catering Association – none of these
publish data on either the size or state of the industry.
OPERATING ENVIRONMENT
Franchising
According to the World Franchise Council, Australia is the most franchised nation in the world,
with three times as many franchises per capita than the United States. This is partly due to
an urge among Australians to work for themselves, along with a middle class affluent enough
that they can afford to make such a leap. Probably the most crucial reason for franchising
being so popular in Australia, however, is to avoid Payroll Tax, which is applicable to
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businesses that pay wages of over A$600,000. Since each franchise is owner-operated, it is
legally its own business, thereby avoiding payroll tax.
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Suppliers
The suppliers for Coffee Club are largely major brands that Australian consumers are familiar
with, such as Dairy Farmers, CSR, Berri, Coca-Cola and Masterfoods.
Its eggs, a crucial ingredient for Coffee Club’s breakfast menu, are from Sunny Queen Farms,
the primary “cage-free” egg farm in Australia. Its coffee is also UTZ Certified, ensuring that the
coffee is farmed using responsible practices, while not increasing the price of the coffee in the
way fair trade does.
Competitive Positioning
With 2% of the overall chained consumer foodservice industry, and ranking 10th, the
company is one of the fastest-growing players in the Australian consumer foodservice
industry. With a 13% value share of chained cafés/bars in 2010, Coffee Club is still some way
behind Jireh International Pty Ltd with its Gloria Jean’s brand, but is gaining through a focus
on selling meals, not just coffee and cakes. In chained cafés it is rapidly catching up with the
category leader, Michel’s Patisserie, and it is likely that in only a couple of years Coffee Club
will be the largest player in chained cafés. This reflects the trend within chained cafés of no
longer just being about coffee and a cake or muffin, but also serving complete meals at a
higher spend per transaction. This change has generated considerable growth for the chained
cafés category, growing 10% in current value terms in 2010 – the third consecutive year that it
experienced double-digit growth. Being one of the key proponents of this strategy, Coffee
Club experienced similarly rapid growth over this period.
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Suppliers
Content removed from sample
Competitive Positioning
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Company Background
Established in 2009 as an umbrella company for Stan Gordon’s growing collection of brands,
Franchised Food Group owns a range of brands including Cold Rock Ice-Creamery (which it
acquired in 2009), Nutshack (2010), Mr Whippy (2000) and Pretzel World (2005). What each
of these brands has in common is that they operate in what Franchised Food refers to as the
“fun treats market”. To emphasise its umbrella brand image the logo for Franchised Food
even includes a smile. Although the mutual acquisitions of 2009 and 2010, would be a lot for
such a relatively small company, Franchised Food is also on the look out for other
acquisitions, making offers for Baskin-Robbins and the remnants of the crumbling Souvlaki
Hut in 2010. Franchised Food’s greatest risk, therefore, is possibly to resist getting too carried
away and becoming too large, too fast.
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Suppliers
Competitive Positioning
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Suppliers
Competitive Positioning
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Suppliers
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Suppliers
Competitive Positioning
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100% HDTA continues to demonstrate strong value growth, although slowing from 9% in
2009 to 8% in 2010
Growth in the number of 100% HDTA outlets slows from 8% to 4% to reach 1,311
Shift towards “gourmet pizza” pushes up spend per transaction from A$16.43 in 2009 to
A$16.79 in 2010
Other 100% HDTA grows 13% in current value terms, albeit from a low base
Domino’s Pizza retains strong lead with 43% value share, although Eagle Boys Dial-A-Pizza
is gaining fast
Continued trend towards “gourmet pizza” expected to evolve further, generating constant
value CAGR of 5% over forecast period
TRENDS
Although not experiencing quite the same spectacular growth as 2009, 100% HDTA still saw
a good year in 2010, with current value growth of 8% and outlet growth of 4%. Some of this
slowdown was merely the result of plateauing and consolidation after the strong growth of the
two preceding years, and some was simply due to stagnant growth in retail spending as a
whole. In fact this stagnation of overall retail spending in the Australian economy contributed
to the growth of 100% HDTA: consumers with a greater propensity to stay at home presented
opportunities for an industry that can bring the food to them.
Predominately, however, growth was generated by a trend towards gourmet pizzas, with a
battle between Pizza Capers and Eagle Boys Dial-A-Pizza to create the most gourmet pizza.
Eagle Boys Dial-A-Pizza offered Seafood Platter, Salmon Avocado and Garlic Prawn pizzas,
while Pizza Caper’s menu featured such offerings as Exotic Potato, and Pear, Blue Cheese
and Walnut. The impact of this was to push up spend per transaction from A$16.43 in 2009 to
A$16.79 in 2010. The impact would be even greater if it were not for the primary driver of this
trend, Crust Gourmet Pizza, operating outside of 100% HDTA, and instead being categorised
under pizza fast food.
“Exotic” and “gourmet” pizza toppings represent just one means of encouraging consumers to
increase their spend per transaction. Domino’s Pizza on the other hand decided to focus on
the crust, with seven different types now on offer, thereby altering the focus of pizza
competition from just the topping to other aspects. This has been enabled by the online
ordering process, whereby consumers are encouraged to individualise their orders. The
primary innovation is the Square Puff Pizza, which includes more pizza due to its square
rather than round shape. It is therefore intended to counter claims by Eagle Boys Dial-a-Pizza
that its pizzas offer greater value because they are larger.
The increasing lack of time faced by Australians, and the attracting of consumers to the
category through “premium” and “gourmet” offerings, are only two reasons for the growth of
100% HDTA. There is a third: the increasing simplification of the ordering process, created
through improvements in the major players’ online booking systems. This has given
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consumers more control and a greater range of options, in that they can tailor their pizzas to
their own taste. This has also provided operators with plentiful opportunities for adding value
and raising spend per transaction. Increasingly, however, consumers are taking the next step,
ordering via the mobile Internet, specifically through iPhone and Android apps. As of
September 2011, Domino’s Pizza was claiming that 12% of pizza orders were through online
mobile.
Growth in 100% HDTA in 2009 and 2010 mostly occurred in Victoria and New South Wales,
where 100% HDTA suddenly caught on in 2009, as consumers shifted from eating-out in full-
service restaurants and fast food towards 100% HDTA. This trend was assisted by a
significant improvement in the quality of HDTA products due to the trend towards “gourmet
pizzas” as championed by Pizza Capers, and larger sizes pizzas, as championed by Eagle
Boys Dial-A-Pizza, which pushed into the large New South Wales market in 2009. In
Queensland, on the other hand, 100% HDTA has long been an especially popular form of
consumer foodservice.
Other 100% HDTA is beginning to emerge in Australia although it is still very embryonic.
Tiffins has begun to deliver Indian food for lunch in the Me bourne Central Business District,
as Indian migrants attempt to replicate a similar tradition of “dabbawalas” in Mumbai, to the
extent that they are delivered by bike – as in Mumbai. The menu changes every day, so that
users of the service can experience a variety of dishes. More traditional Indian 100% HDTA
has emerged in Brisbane through Sitar Express, with 11 outlets. On a different front,
Croissant Express in Perth has built a business based on delivering croissants and other
bakery items to office workers.
Although there has been a migration upwards towards premium and gourmet pizzas, the
same has not occurred in relation to drinks in 100% HDTA. The result is that food expenditure
has grown significantly more than drink expenditure.
COMPETITIVE LANDSCAPE
With competition in 100% HDTA intensifying in 2010, Domino’s remained the leading brand
with 43% value share, although this slipped from 44% in 2009. Despite its attempts to
compete with Eagle Boys Dial-a-Pizza and Pizza Capers by innovating on the pizza crust
instead of the toppings, it was the increasingly exotic toppings of Eagle Boys Dial-A-Pizza that
achieved the greatest gains. The company’s value share increased from 20% in 2009 to 22%
in 2010. It even acquired Pizza Haven, previously a major player in 100% HDTA in Australia,
but whose low-price positioning has become irrelevant, and consequently the company had
virtually disappeared at the time of writing.
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PROSPECTS
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CATEGORY DATA
Table 1 100% Home Delivery/Takeaway by Category: Units/Outlets 2005-2010
outlets
2005 2006 2007 2008 2009 2010
'000 transactions
2005 2006 2007 2008 2009 2010
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Delivery/Takeaway
- Chained Pizza 100%
Home Delivery/Takeaway
- Independent Pizza Data removed from sample
100% Home Delivery/
Takeaway
Other 100% Home
Delivery/Takeaway
- Chained Other 100%
Home Delivery/Takeaway
- Independent Other
100% Home Delivery/
Takeaway
100% Home Delivery/
Takeaway
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
A$ million
2005 2006 2007 2008 2009 2010
% Units/Outlets growth
2009/10 2005-10 CAGR 2005/10 TOTAL
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% transaction growth
2009/10 2005-10 CAGR 2005/10 TOTAL
% value growth
2009/10 2005-10 CAGR 2005/10 TOTAL
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% value
Company 2006 2007 2008 2009 2010
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
% value
Brand Global Brand Owner 2007 2008 2009 2010
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
outlets
2010 2011 2012 2013 2014 2015
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'000 transactions
2010 2011 2012 2013 2014 2015
A$ million
2010 2011 2012 2013 2014 2015
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Delivery/Takeaway
- Chained Pizza 100%
Home Delivery/Takeaway
- Independent Pizza Data removed from sample
100% Home Delivery/
Takeaway
Other 100% Home
Delivery/Takeaway
- Chained Other 100%
Home Delivery/Takeaway
- Independent Other
100% Home Delivery/
Takeaway
100% Home Delivery/
Takeaway
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
% Units/Outlets growth
2010-15 CAGR 2010/15 TOTAL
% transaction growth
2010-15 CAGR 2010/15 TOTAL
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% value growth
2010-15 CAGR 2010/15 TOTAL
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CAFÉS/BARS IN AUSTRALIA -
CATEGORY ANALYSIS
HEADLINES
TRENDS
Cafés/bars had a tough year in 2010, with the value of the category falling by 2% in current
value terms. This fall was seen predominately within bars/pubs, as consumers increasingly
preferred to entertain at home during the economic slowdown.
The most positive news in cafés/bars in 2010 was that consumers increased their spend per
transaction considerably, from A$8.87 in 2009 to A$9.35. Operators achieved this by
increasing focus on their food offerings, as opposed to their key drinks offering. The offerings
of many bars/pubs as well as chained cafés such as Coffee Club are increasingly matching
those of full-service restaurants, thus providing an opportunity for operators to upsell.
Therefore, although it was interest in coffee that initially drove consumers to embrace the
“café culture”, the focus of such establishments is increasingly on food. One means by which
they have achieved this is through a trend towards “afternoon teas”, specifically “high tea” with
nostalgia positioning. In this concept, which is only a niche trend in 2011, although one that is
growing, for around A$30-40 a consumer can have a selection of little sandwiches, cupcakes
and tea.
The growing focus on food instead of coffee is a strategy that also serves to expand the
variety of occasions when consumers might wish to patronise a café/bar from the traditional
lunch or brunch, to evening dinner. This is a particularly crucial strategy given that a café,
whose business is generally focused on coffee, has traditionally found it difficult to compete in
the lucrative evening meal segment.
The cafés/bars category predominately comprises independents, although this varies
between segments. The bars/pubs category is entirely made up of independents, with only
14% of outlets being chained in 2010. While it is true that a large proportion of Australian
bars/pubs are owned by large conglomerates such as Woolworths Limited and National
Leisure and Gaming, they are not branded as chains. Juice Bars, on the other hand, are
almost exclusively in chained form, specifically the dominant Boost Juice chain. Increasingly,
however, chains are growing in popularity as they offer a better chance of success. Since
many cafés/bars are set up by people with little business experience but who have “always
dreamt of running a café/bar”, many only have a short life-span, whereas an established
franchise is typically considered a safer bet.
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Bars/pubs particularly declined in 2010, falling 6% in current value terms. Bars/pubs were
particularly impacted by the economic slowdown, as Australian consumers have a growing
preference for holding their social events in the home instead of going out and patronising
bars/pubs. The economic slowdown is only one reason for this, however, as consistent bad
publicity regarding violence in nightclubs and pubs, particularly in the Melbourne CBD, have
discouraged consumers from going out. Similarly, Australia’s ageing population is also a
factor: as consumers grow older they are less likely to visit bars/pubs.
One trend benefiting bars/pubs, however, has been a shift from drinks to food, and a
consequent upward movement in spend per transaction from A$8.66 in 2009 to A$9.21 in
2010. This is a trend that has accumulated over the first decade of the 21st century. A more
restrained drinking culture in Australia over the last decade has led to consumption of less
alcohol per capita (according to figures from the Australian Bureau of Statistics), and the
consequent focus of bars/pubs on “pub meals”. This is particularly in relation to the evolution
of the “gastro-pub” – pubs serving meals of restaurant quality and price.
Me bourne is generally recognised as having a more v brant bar culture than Sydney, with a
large number of small bars, compared with Sydney, which is skewed far more towards larger
establishments such as nightclub and large pubs, often referred to as “beer barns”. These
nightclubs and beer barns have received a bad reputation, as the source of much alcohol-
fuelled violence. As a result the New South Wales Government has attempted to change the
culture of Sydney by encouraging the establishment of smaller establishments through the
2008 introduction of the Small Bar License. This was followed by a similar license in Brisbane
in 2009. Although it took a couple of years to take off, 2010 saw a significant increase in the
number of bars in Sydney, as well as the number of cafés serving alcohol. This trend away
from nightclubs towards small bars is timely, as it coincides with a declining number of 18
year-olds to replace those Australians reaching the age of 30, and thus preferring the comfort
of a “small bar”.
Chained specialist coffee shops experienced the strongest growth in 2010, with a 12%
increase in current value terms compared with 10% in 2009. Although a significant jump, this
was mostly due to the impact of one event – the renovation of McDonald’s to incorporate
McCafé outlets, which typical co-exist within the existing McDonald’s restaurant. Given the
convenience of McCafé to existing McDonald’s customers – and the popularity of McDonald’s
in Australia is greater than in most other markets – these have been hugely successful. By
appealing to consumers other than those typically catered to by “café culture”, they have
contributed to growth. This transformation of McDonald’s to incorporate McCafé
establishments is a one-off, however, and unlikely to be replicated over the forecast period.
As the number of cafés in Australia reaches saturation point, chains that are eager to expand
increasingly resort to alternative locations. Aroma Café has a strong presence in educational
institutions and even major libraries, whereas the similarly named but very different Aromas
has expanded through airports. The rapid expansion of McCafé was similarly enabled by the
fact that it could be integrated into existing premises, thus avoiding the need for attractive
locations – such as in shopping centres – to become available.
After some spectacular growth over the 2000s, the juice bars category in Australia has
reached saturation point. Furthermore, the extremely mild summer experienced across
Australia over 2010 and 2011 suppressed growth in the segment
COMPETITIVE LANDSCAPE
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PROSPECTS
The forecast period will be awkward for cafés/bars, with a constant value CAGR of only 2%
predicted, as consumers limit their spending over the forecast period. The strategy towards
encouraging consumers to buy a meal in addition to coffee and a cake will pay dividends as
the economy recovers, however, and consumers become more willing to spend more.
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CATEGORY DATA
Table 1 Cafés/Bars by Category: Units/Outlets 2005-2010
outlets
2005 2006 2007 2008 2009 2010
Chained Cafés/Bars
Independent Cafés/Bars
Bars/Pubs Data removed from sample
- Chained Bars/Pubs
- Independent Bars/Pubs
Cafés
- Chained Cafés
- Independent Cafés
Juice/Smoothie Bars
- Chained Juice/
Smoothie Bars
- Independent Juice/
Smoothie Bars
Specialist Coffee Shops
- Chained Specialist
Coffee Shops
- Independent
Specialist Coffee Shops
Cafés/Bars
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
Mn transactions
2005 2006 2007 2008 2009 2010
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A$ million
2005 2006 2007 2008 2009 2010
Chained Cafés/Bars
Independent Cafés/Bars
Bars/Pubs Data removed from sample
- Chained Bars/Pubs
- Independent Bars/Pubs
Cafés
- Chained Cafés
- Independent Cafés
Juice/Smoothie Bars
- Chained Juice/
Smoothie Bars
- Independent Juice/
Smoothie Bars
Specialist Coffee Shops
- Chained Specialist
Coffee Shops
- Independent
Specialist Coffee Shops
Cafés/Bars
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
% Units/Outlets growth
2009/10 2005-10 CAGR 2005/10 TOTAL
Chained Cafés/Bars
Independent Cafés/Bars Data removed from sample
Bars/Pubs
- Chained Bars/Pubs
- Independent Bars/Pubs
Cafés
- Chained Cafés
- Independent Cafés
Juice/Smoothie Bars
- Chained Juice/Smoothie Bars
- Independent Juice/Smoothie Bars
Specialist Coffee Shops
- Chained Specialist Coffee Shops
- Independent Specialist Coffee Shops
Cafés/Bars
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Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
% transaction growth
2009/10 2005-10 CAGR 2005/10 TOTAL
Chained Cafés/Bars
Independent Cafés/Bars Data removed from sample
Bars/Pubs
- Chained Bars/Pubs
- Independent Bars/Pubs
Cafés
- Chained Cafés
- Independent Cafés
Juice/Smoothie Bars
- Chained Juice/Smoothie Bars
- Independent Juice/Smoothie Bars
Specialist Coffee Shops
- Chained Specialist Coffee Shops
- Independent Specialist Coffee Shops
Cafés/Bars
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
% value growth
2009/10 2005-10 CAGR 2005/10 TOTAL
Chained Cafés/Bars
Independent Cafés/Bars Data removed from sample
Bars/Pubs
- Chained Bars/Pubs
- Independent Bars/Pubs
Cafés
- Chained Cafés
- Independent Cafés
Juice/Smoothie Bars
- Chained Juice/Smoothie Bars
- Independent Juice/Smoothie Bars
Specialist Coffee Shops
- Chained Specialist Coffee Shops
- Independent Specialist Coffee Shops
Cafés/Bars
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
% value
Company 2006 2007 2008 2009 2010
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% value
Brand Global Brand Owner 2007 2008 2009 2010
iva Juice
Total 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
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outlets
2010 2011 2012 2013 2014 2015
Chained Cafés/Bars
Independent Cafés/Bars
Bars/Pubs Data removed from sample
- Chained Bars/Pubs
- Independent Bars/Pubs
Cafés
- Chained Cafés
- Independent Cafés
Juice/Smoothie Bars
- Chained Juice/
Smoothie Bars
- Independent Juice/
Smoothie Bars
Specialist Coffee Shops
- Chained Specialist
Coffee Shops
- Independent
Specialist Coffee Shops
Cafés/Bars
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
Mn transactions
2010 2011 2012 2013 2014 2015
Chained Cafés/Bars
Independent Cafés/Bars
Bars/Pubs Data removed from sample
- Chained Bars/Pubs
- Independent Bars/Pubs
Cafés
- Chained Cafés
- Independent Cafés
Juice/Smoothie Bars
- Chained Juice/
Smoothie Bars
- Independent Juice/
Smoothie Bars
Specialist Coffee Shops
- Chained Specialist
Coffee Shops
- Independent
Specialist Coffee Shops
Cafés/Bars
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
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A$ million
2010 2011 2012 2013 2014 2015
Chained Cafés/Bars
Independent Cafés/Bars
Bars/Pubs Data removed from sample
- Chained Bars/Pubs
- Independent Bars/Pubs
Cafés
- Chained Cafés
- Independent Cafés
Juice/Smoothie Bars
- Chained Juice/
Smoothie Bars
- Independent Juice/
Smoothie Bars
Specialist Coffee Shops
- Chained Specialist
Coffee Shops
- Independent
Specialist Coffee Shops
Cafés/Bars
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
% Units/Outlets growth
2010-15 CAGR 2010/15 TOTAL
Chained Cafés/Bars
Independent Cafés/Bars Data removed from sample
Bars/Pubs
- Chained Bars/Pubs
- Independent Bars/Pubs
Cafés
- Chained Cafés
- Independent Cafés
Juice/Smoothie Bars
- Chained Juice/Smoothie Bars
- Independent Juice/Smoothie Bars
Specialist Coffee Shops
- Chained Specialist Coffee Shops
- Independent Specialist Coffee Shops
Cafés/Bars
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
% transaction growth
2010-15 CAGR 2010/15 TOTAL
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Bars/Pubs
- Chained Bars/Pubs Data removed from sample
- Independent Bars/Pubs
Cafés
- Chained Cafés
- Independent Cafés
Juice/Smoothie Bars
- Chained Juice/Smoothie Bars
- Independent Juice/Smoothie Bars
Specialist Coffee Shops
- Chained Specialist Coffee Shops
- Independent Specialist Coffee Shops
Cafés/Bars
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
% value growth
2010-15 CAGR 2010/15 TOTAL
Chained Cafés/Bars
Independent Cafés/Bars Data removed from sample
Bars/Pubs
- Chained Bars/Pubs
- Independent Bars/Pubs
Cafés
- Chained Cafés
- Independent Cafés
Juice/Smoothie Bars
- Chained Juice/Smoothie Bars
- Independent Juice/Smoothie Bars
Specialist Coffee Shops
- Chained Specialist Coffee Shops
- Independent Specialist Coffee Shops
Cafés/Bars
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
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FULL-SERVICE RESTAURANTS IN
AUSTRALIA - CATEGORY ANALYSIS
HEADLINES
Full-service restaurants grow 4% in current value terms in 2010 to reach A$14.6 billion
Number of outlets edges upwards 1% in 2010 to reach 22,886
Full-service restaurants benefit from “MasterChef effect”
Latin American full-service restaurants see greatest value growth of 7%
Full-service restaurants category remains hugely fragmented with the largest – Hog’s Breath
Café – holding only 1% value share at end of review period
Growth over forecast period expected to continue with constant value CAGR of 2%
TRENDS
Despite a general slowdown in retail over 2010, consumers still found reasons to engage in
full-service restaurants, which have saw 4% current value growth that year. Although spend
per transaction edged up in full-service restaurants from A$39.15 in 2009 to A$39.87 in 2010,
this impact was far less than in the case of other categories. This was because consumers did
not feel confident in spending excessively, and generally moved down from expensive full-
service restaurants to casual dining establishments, where the cost is much lower.
Over 2009 and 2010 the most popular television programme in Australia was the cooking-
based reality show, MasterChef. The final of 2010 was the most-watched non-sporting event
in Australian television history. While this led to a boom in Australians attempting to develop
their own culinary skills at home, the majority of consumers have realised that this is beyond
their ability, and they instead satisfy their renewed interest in food patronising full-service
restaurants. This desire has been further driven by social media such as UrbanSpoon, which
allows consumers to share reviews and ratings for their favourite establishments.
Asian full-service restaurants remain the most common form of restaurant in Australia,
accounting for 23% of outlets, although only 13% of value – a disparity partly explained their
tendency to be an inexpensive places to eat. They also experienced significant current value
growth of 7% in 2010. This was predominately created by independents, with consumers
generally rejecting chains for full-service Asian restaurants in the hope of a more authentic
experience. As Asian migration continues, from an expanding range of home countries, so
Australians are becoming increasingly familiar both with Asian food, and the Asian-way of
consuming food, such as Peking Duck, which has become particularly popular in Melbourne,
or sushi trains, embraced by consumers in Sydney and Queensland. Asian immigration is
also developing Asian full-service restaurants from the supply side, with setting up a
restaurant a popular occupational choice among recent immigrants. Immigrants such as Asian
international students have also served to give a large boost to Asian full-service restaurants.
Thai and Chinese restaurants have particularly driven growth, and while enthusiasm for
Japanese restaurants appears to have waned, sushi restaurants have captured the Australian
imagination, particularly the “sushi train” variety.
Latin American full-service restaurants experienced the strongest current value terms growth
of 7% in 2010. This interest partially arose through an infatuation with a number of key items
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in Spanish and Latin American cuisine such as tapas and churros (otherwise known as
Spanish doughnuts), and is part of a growing interest in Latin American cuisine also manifest
in fast food through growing chains such as Salsas Fresh Mex Grill. This growth occurred
despite Australia not possessing a large number of Latin American immigrants.
Although it is independent restaurants that have driven growth more than chains in Asian,
European, North American, and pizza restaurants, the big exception is in “other full serviced
restaurants”, where chocolate-themed restaurants drove a considerable boom in chained
other full serviced restaurants of 97% growth in value in 2010, following on from the 28%
value growth in 2009. The huge growth of San Churro and Max Brenner’s have introduced the
concept of chocolate restaurants to Australia, where it has been embraced far more than in
other markets around the world.
Other full-service restaurants represent a large proportion of the market, much of which is
made up of what is referred to as “Modern Australian”. Menus are typically a “fusion” of
Eastern and Western influences, with a focus on seafood. Prices are typically premium, and
thus such outlets accounted for over 30% of the total value of full-service restaurants in 2010.
Growth has come from the fast-emerging chocolate-themed restaurant scene, however,
through players such as San Churro and Max Brenner’s.
Although formal dining options are commonplace in Australia, the informality of the Australian
people means that a significant proportion of full-service restaurants in Australia are in the
casual dining format championed by chains such as Hog’s Breath Café, La Porchetta,
Outback Jacks and Fasta Pasta. Casual dining has experienced the most success in North
American full-service restaurants, where “American”-themed restaurants have great aesthetic
similarities to “Australian”-themed restaurants, including their casual atmosphere.
As Australians become more familiar with different cuisines, they increasingly feel that they do
not need to “go out” in order to have such an experience, with a growing proportion of
transactions coming instead from takeaway sales. As a result takeaway accounted for 19% of
the value of transactions in 2010, much of which was derived from pizza and Asian full-
service restaurants.
COMPETITIVE LANDSCAPE
Full-service restaurants in Australia are predominately independent, with only a small share –
3% of outlets and 6% of value – held by chains at the end of the review period. On those
occasions when consumers may visit a full-service restaurant they tend to prefer a unique and
more authentic experience, that can be offered by a chain. However, as Australian consumers
have become familiar with Asian foods they have demonstrated a growing preference
authentic, individual establishments in this particular category. In North American restaurants,
by contrast, being part of a chain is considered part of the cultural experience.
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PROSPECTS
Sudden and unanticipated fads for particular cuisines not taken into account, the constant
value CAGR for full-service restaurants is expected to be 2% over the forecast period. This
will be driven mostly by Asian and Latin American full-service restaurants, as Australian
consumers are attracted to cuisine which they are not capable of reproducing themselves at
home. The potential growth of full-service restaurants will be impacted, however, by the
“premiumisation” of other categories such as fast food and cafés/bars. Both have improved
their meal offerings and are therefore encroaching on the consumers typically served by full-
service restaurants, particularly at the value end of the market. This is a particular threat in
terms of Latin American full-service restaurants, which will face growing competition from “fast
casual”-style Latin American fast food establishments such as Salsa Fresh Mex Grill.
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CATEGORY DATA
Table 1 Full-Service Restaurants by Category: Units/Outlets 2005-2010
outlets
2005 2006 2007 2008 2009 2010
Chained Full-Service
Restaurants
Independent Full-
Service Restaurants Data removed from sample
Asian Full-Service
Restaurants
- Chained Asian Full-
Service Restaurants
- Independent Asian
Full-Service Restaurants
European Full-Service
Restaurants
- Chained European Full-
Service Restaurants
- Independent European
Full-Service Restaurants
Latin American Full-
Service Restaurants
- Chained Latin
American Full-Service
Restaurants
- Independent Latin
American Full-Service
Restaurants
Middle Eastern Full-
Service Restaurants
- Chained Middle
Eastern Full-Service
Restaurants
- Independent Middle
Eastern Full-Service
Restaurants
North American Full-
Service Restaurants
- Chained North
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American Full-Service
Restaurants
- Independent North Data removed from sample
American Full-Service
Restaurants
Pizza Full-Service
Restaurants
- Chained Pizza Full-
Service Restaurants
- Independent Pizza
Full-Service Restaurants
Other Full-Service
Restaurants
- Chained Other Full-
Service Restaurants
- Independent Other
Full-Service Restaurants
Casual Dining Full-
Service Restaurants
Full-Service Restaurants
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
'000 transactions
2005 2006 2007 2008 2009 2010
Chained Full-Service
Restaurants
Independent Full-
Data removed from sample
Service Restaurants
Asian Full-Service
Restaurants
- Chained Asian Full-
Service Restaurants
- Independent Asian
Full-Service Restaurants
European Full-Service
Restaurants
- Chained European Full-
Service Restaurants
- Independent European
Full-Service Restaurants
Latin American Full-
Service Restaurants
- Chained Latin
American Full-Service
Restaurants
- Independent Latin
American Full-Service
Restaurants
Middle Eastern Full-
Service Restaurants
- Chained Middle
Eastern Full-Service
Restaurants
- Independent Middle
Eastern Full-Service
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Restaurants
North American Full-
Service Restaurants
- Chained North Data removed from sample
American Full-Service
Restaurants
- Independent North
American Full-Service
Restaurants
Pizza Full-Service
Restaurants
- Chained Pizza Full-
Service Restaurants
- Independent Pizza
Full-Service Restaurants
Other Full-Service
Restaurants
- Chained Other Full-
Service Restaurants
- Independent Other
Full-Service Restaurants
Casual Dining Full-
Service Restaurants
Full-Service Restaurants
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
A$ million
2005 2006 2007 2008 2009 2010
Chained Full-Service
Restaurants
Independent Full-
Service Restaurants Data removed from sample
Asian Full-Service
Restaurants
- Chained Asian Full-
Service Restaurants
- Independent Asian
Full-Service Restaurants
European Full-Service
Restaurants
- Chained European Full-
Service Restaurants
- Independent European
Full-Service Restaurants
Latin American Full-
Service Restaurants
- Chained Latin
American Full-Service
Restaurants
- Independent Latin
American Full-Service
Restaurants
Middle Eastern Full-
Service Restaurants
- Chained Middle
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Eastern Full-Service
Restaurants
- Independent Middle
Eastern Full-Service
Restaurants Data removed from sample
North American Full-
Service Restaurants
- Chained North
American Full-Service
Restaurants
- Independent North
American Full-Service
Restaurants
Pizza Full-Service
Restaurants
- Chained Pizza Full-
Service Restaurants
- Independent Pizza
Full-Service Restaurants
Other Full-Service
Restaurants
- Chained Other Full-
Service Restaurants
- Independent Other
Full-Service Restaurants
Casual Dining Full-
Service Restaurants
Full-Service Restaurants
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
% Units/Outlets growth
2009/10 2005-10 CAGR 2005/10 TOTAL
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Restaurants
- Independent North American Full- Data removed from sample
Service Restaurants
Pizza Full-Service Restaurants
- Chained Pizza Full-Service Restaurants
- Independent Pizza Full-Service
Restaurants
Other Full-Service Restaurants
- Chained Other Full-Service Restaurants
- Independent Other Full-Service
Restaurants
Casual Dining Full-Service Restaurants
Full-Service Restaurants
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
% transaction growth
2009/10 2005-10 CAGR 2005/10 TOTAL
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% value growth
2009/10 2005-10 CAGR 2005/10 TOTAL
% value
Company 2006 2007 2008 2009 2010
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Others
Total 100.0 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
% value
Brand Global Brand Owner 2007 2008 2009 2010
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outlets
2010 2011 2012 2013 2014 2015
Chained Full-Service
Restaurants
Independent Full- Data removed from sample
Service Restaurants
Asian Full-Service
Restaurants
- Chained Asian Full-
Service Restaurants
- Independent Asian
Full-Service Restaurants
European Full-Service
Restaurants
- Chained European Full-
Service Restaurants
- Independent European
Full-Service Restaurants
Latin American Full-
Service Restaurants
- Chained Latin
American Full-Service
Restaurants
- Independent Latin
American Full-Service
Restaurants
Middle Eastern Full-
Service Restaurants
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- Chained Middle
Eastern Full-Service
Restaurants
- Independent Middle Data removed from sample
Eastern Full-Service
Restaurants
North American Full-
Service Restaurants
- Chained North
American Full-Service
Restaurants
- Independent North
American Full-Service
Restaurants
Pizza Full-Service
Restaurants
- Chained Pizza Full-
Service Restaurants
- Independent Pizza
Full-Service Restaurants
Other Full-Service
Restaurants
- Chained Other Full-
Service Restaurants
- Independent Other
Full-Service Restaurants
Casual Dining Full-
Service Restaurants
Full-Service Restaurants
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
'000 transactions
2010 2011 2012 2013 2014 2015
Chained Full-Service
Restaurants
Independent Full- Data removed from sample
Service Restaurants
Asian Full-Service
Restaurants
- Chained Asian Full-
Service Restaurants
- Independent Asian
Full-Service Restaurants
European Full-Service
Restaurants
- Chained European Full-
Service Restaurants
- Independent European
Full-Service Restaurants
Latin American Full-
Service Restaurants
- Chained Latin
American Full-Service
Restaurants
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- Independent Latin
American Full-Service
Restaurants
Middle Eastern Full- Data removed from sample
Service Restaurants
- Chained Middle
Eastern Full-Service
Restaurants
- Independent Middle
Eastern Full-Service
Restaurants
North American Full-
Service Restaurants
- Chained North
American Full-Service
Restaurants
- Independent North
American Full-Service
Restaurants
Pizza Full-Service
Restaurants
- Chained Pizza Full-
Service Restaurants
- Independent Pizza
Full-Service Restaurants
Other Full-Service
Restaurants
- Chained Other Full-
Service Restaurants
- Independent Other
Full-Service Restaurants
Casual Dining Full-
Service Restaurants
Full-Service Restaurants
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
A$ million
2010 2011 2012 2013 2014 2015
Chained Full-Service
Restaurants
Independent Full-
Data removed from sample
Service Restaurants
Asian Full-Service
Restaurants
- Chained Asian Full-
Service Restaurants
- Independent Asian
Full-Service Restaurants
European Full-Service
Restaurants
- Chained European Full-
Service Restaurants
- Independent European
Full-Service Restaurants
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% Units/Outlets growth
2010-15 CAGR 2010/15 TOTAL
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Restaurants
Middle Eastern Full-Service Restaurants
- Chained Middle Eastern Full-Service Restaurants
Data removed from sample
- Independent Middle Eastern Full-Service
Restaurants
North American Full-Service Restaurants
- Chained North American Full-Service Restaurants
- Independent North American Full-Service
Restaurants
Pizza Full-Service Restaurants
- Chained Pizza Full-Service Restaurants
- Independent Pizza Full-Service Restaurants
Other Full-Service Restaurants
- Chained Other Full-Service Restaurants
- Independent Other Full-Service Restaurants
Casual Dining Full-Service Restaurants
Full-Service Restaurants
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
% transaction growth
2010-15 CAGR 2010/15 TOTAL
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% value growth
2010-15 CAGR 2010/15 TOTAL
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Fast food grows 7% in current value terms in 2010 to reach A$13.5 billion
Number of outlets rises 3% to 17,294
With trend towards “gourmet fast food”, spend per transaction rises from A$9.26 in 2009 to
A$9.60 in 2010
Latin American fast food grows fastest with 47% current value terms increase in 2010
McDonald’s brand dominates with 21% value share
Fast food predicted to see steady constant value CAGR of 4% over forecast period
TRENDS
Despite the economic slowdown fast food had a particularly successful year in 2010, growing
7% in current value terms, down from the 9% increase of 2009. There were several reasons
for this continued strong growth, including consumers reducing expenditure and thus trading
down during the economic slowdown. At the same time, the boundaries between fast food
and full-service restaurants are increasingly blurred. This is due to the growth of chains that
follow the “fast casual” concept, and a “gourmet” trend, which is particularly evident in pizza
fast food and burger fast food. In pizza fast food, this was driven by new players such as
Crust Gourmet Pizza and Pizza Capers, while burger fast food has a new gourmet player:
Grill’d. Meanwhile, established players, including leader McDonald’s, have added value
through such offerings as the Grand Angus and Mighty Angus, and its gourmet M Selections
range. Each of these trends also contributed to the strong growth of 2009, but their influence
was still felt in 2010.
Fast casual has begun to emerge in Australia, with Nando’s the primary champion of this
trend. Outlets were renovated and new outlets designed that were larger than typical fast food
establishments, and with a more “authentic” atmosphere. Emerging player Salsas Fresh Mex
Grill is also developing its “fast casual” offerings, opening more stores in this format, while
Grill’d introduced this trend into burger fast food. Although, with the except of Nando’s, each
of these brands are rapidly expanding emerging players, so is fast casual growing especially
fast with 61% current value terms growth in 2010.
Outlet growth lagged behind value growth in 2010, growing only 3% as difficulties in obtaining
finance during the economic slowdown discouraged Australians from embracing franchising,
which is the primary means of expansion for fast food operators. This has represented a boon
for existing franchisees, however, as not only does it mean that sales per outlet increased
from A$739,000 in 2009 to A$763,000 in 2010, but much of the expansion came from existing
franchisees buying an additional franchise. Thus, fast food was a particularly profitable
industry in 2010.
Latin American fast food has not previously represented a major part of Australia’s fast food
culture, largely due to a lack of Latin American immigrants. However, two chains – Salsas
Fresh Mex Grill and Zambrero Fresh Mex Grill – as well as several smaller players, emerged
in 2010. Some of these had considerable financial support from major players in the
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Australian consumer foodservice industry. Salsas Fresh Mex Grill, for example, is backed by
Janine Allis, who established the Boost Juice chain, and Guzman y Gomez, the founder of
McDonald Australasia. Consumers who also had their interest spiked by other aspects of
Latin American cuisine, such as churros and paella, have embraced Latin American fast food.
This segment saw 47% value growth in 2010, albeit from a low base, up from A$52 million in
2009 to A$76 million in 2010 (compared with almost A$4 billion for burger fast food).
Even during tough economic times, consumers want to indulge themselves, and have
consequently embraced “affordable indulgences”. They are willing to spend an extra couple of
dollars on something special, with the result being a rise in spend per transaction from A$9.26
in 2009 to A$9.60 in 2010. It is this embracing of “affordable indulgences” that has
underpinned the gourmet fast food trend, with consumers willing to spend A$10.00 on a
burger from Grill’d, or A$25.00 on a gourmet pizza from Crust Gourmet Pizza. The pizza
category has benefited most from this trend, growing 27% in current value terms in 2010.
Bakery products fast food has shifted towards sandwich specialists, which accounted for a
55% value share in 2010. This was not only due to the strength of category leader Subway,
but consumers attempting to shift to healthy eating options such as the sandwiches sold by
Healthy Habits and Fancy Fillings. Meanwhile Krispy Kreme saw over a third of its outlets
close in 2010 after it failed to make a significant dent in Donut King’s share.
Despite long-term discussion of the growing popularity of healthfood, this finally appears to
have gone mainstream, with several franchised chains, such as SumoSalad, reaching critical
mass required to both reach high brand awareness and take advantage of economies of
scale. Sumo Salad is now the largest player in other fast food, as well as leading in healthy
fast food – a position it reinforced in 2010 by replacing its white bread rolls with healthier
multigrain, soy and linseed rolls.
Chains of Asian Fast Food have not performed well in Australia, despite the popularity of
Asian food in Australia in general. This is largely due to the availability of inexpensive Asian
food in full-service restaurants, thus negating the need for an even cheaper fast food option.
As a result, Asian fast food is largely confined to food courts in shopping centres. However,
with a number of small but rapidly growing chains such as Wok Me and Red Rock Noodle
Bar, as well as more established players such as Noodle Box and wokinabox, this may soon
change. Asian fast food experienced 6% current value terms growth in 2010.
Chicken fast food have represented one of the strongest performing categories in recent
years, with 8% current value growth in 2010. This reflects trends not only in consumer
foodservice but also in consumption trends in general. This is partially due to its low price, but
also the variety of ways chicken can be prepared – crumbed, fried or grilled for example. The
increasing attraction of Australian consumers to chicken is therefore likely to continue over the
forecast period.
Breakfast is growing particularly rapidly for fast food in Australia. This is underpinned by the
success of McCafé, which other fast food operators are attempting to replicate to some
extent. Hungry Jack’s has rolled out opening for breakfast across Australia – a process that
was completed by the middle of 2010, while also expanding the number of outlets open on a
24/7 basis. Subway also produced a breakfast offering, and has in general expanded its
business hours.
COMPETITIVE LANDSCAPE
McDonald’s remains by far the largest player in fast food in Australia, holding a value share of
over 30% in chained fast food, and an incredible 78% in chained burger fast food. This has
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long been one of the strongest global markets for McDonald’s. One of the reasons for this is
that the improvements in the McDonald’s brand – in terms of health, for example – were
initiated by McDonald’s in Australia, which made it more acceptable to consumers, many of
whom previously considered McDonald’s’ offerings as simply junk food. Many consumers still
do hold this perception, but increasingly McDonald’s is reaping the benefits of its improved
brand image. These initiatives include the integration of McCafé – initially invented in
Australia in 1993, and since adopted by McDonald’s around the world – into McDonald’s’
outlets, and its offering of free wi-fi. These efforts represented an important part of the
company’s attempt to move away from its “fast food” image towards creating a more stylish
environment in which consumers want to spend more time. As a result, not only has McCafé
contributed to rising spend per transaction within the combination of McDonald’s/McCafé, but
it has also served to take share from other competitors. However, spend per transaction
within McDonald’s itself has edged down as consumers choose a coffee instead of a Coke,
for example.
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Content removed from sample
PROSPECTS
Much of the success of fast food in recent years has been due to the popularity of the Angus
burger, the emergence of both “gourmet burgers” and “gourmet pizzas”, as well as the fast
casual concept. The impact of these is likely to fade over the forecast period. Even though
Grill’d, with a less than 1% value share in burger fast food, could potentially gain a couple of
extra percentage points as it expands across Australia, it remains only a minor player, and
would have only a minor impact on the overall fast food category. Furthermore, fast casual is
unlikely to have a major impact on Australia, as the market already has a wide variety of
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inexpensive eating options, typically referred to as “cheap eats”. Although many fast food
operators, ranging from Nando’s to McDonald’s with its incorporation of McCafé, are
renovating their outlets to make them more attractive and encourage consumers to spend
more, such additional expenditure is likely to be marginal. As a result, fast food is expected to
experience a solid constant value CAGR of 4% over the forecast period, while the
premiumisation trend will increase spend per transaction from A$9.60 in 2010 up to A$10.06
in 2011.
CATEGORY DATA
Table 1 Fast Food by Category: Units/Outlets 2005-2010
outlets
2005 2006 2007 2008 2009 2010
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Mn transactions
2005 2006 2007 2008 2009 2010
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Fast Food
Fast Casual Dining Data removed from sample
Fast Food
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
A$ million
2005 2006 2007 2008 2009 2010
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% Units/Outlets growth
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% transaction growth
2009/10 2005-10 CAGR 2005/10 TOTAL
% value growth
2009/10 2005-10 CAGR 2005/10 TOTAL
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% value
2007 2008 2009 2010
% value
Company 2006 2007 2008 2009 2010
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% value
Brand Global Brand Owner 2007 2008 2009 2010
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outlets
2010 2011 2012 2013 2014 2015
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Mn transactions
2010 2011 2012 2013 2014 2015
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- Independent Asian
Fast Food
Bakery Products Fast Food
- Chained Bakery
Products Fast Food Data removed from sample
- Independent Bakery
Products Fast Food
Burger Fast Food
- Chained Burger Fast
Food
- Independent Burger
Fast Food
Chicken Fast Food
- Chained Chicken Fast
Food
- Independent Chicken
Fast Food
Convenience Stores Fast
Food
- Chained Convenience
Stores Fast Food
- Independent
Convenience Stores Fast
Food
Fish Fast Food
- Chained Fish Fast Food
- Independent Fish Fast
Food
Ice Cream Fast Food
- Chained Ice Cream
Fast Food
- Independent Ice Cream
Fast Food
Latin American Fast Food
- Chained Latin
American Fast Food
- Independent Latin
American Fast Food
Middle Eastern Fast Food
- Chained Middle
Eastern Fast Food
- Independent Middle
Eastern Fast Food
Pizza Fast Food
- Chained Pizza Fast Food
- Independent Pizza
Fast Food
Other Fast Food
- Chained Other Fast Food
- Independent Other
Fast Food
Fast Casual Dining
Fast Food
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
A$ million
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© Euromonitor International
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Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
% Units/Outlets growth
2010-15 CAGR 2010/15 TOTAL
% transaction growth
2010-15 CAGR 2010/15 TOTAL
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Table 15 Forecast Sales in Fast Food by Category: % Foodservice Value Growth 2010-
2015
% value growth
2010-15 CAGR 2010/15 TOTAL
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SELF-SERVICE CAFETERIAS IN
AUSTRALIA - CATEGORY ANALYSIS
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
The only self-service cafeteria chain in Australia is MYO – “make your own”. This allows
consumers to make their own sandwiches and salads from component ingredients. Outlets
are located within business districts in order to capture busy office workers, and also those
who have specific tastes.
PROSPECTS
Although MYO appears to be largely successful, it is not large enough to inspire other chains
to emerge with their own take on the concept. Also, despite several years of expansion, the
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company had only 19 outlets at the end of the review period – a significant number but not a
run-away success.
CATEGORY DATA
Table 1 Self-Service Cafeterias: Units/Outlets 2005-2010
outlets
2005 2006 2007 2008 2009 2010
Chained Self-Service
Cafeterias Data removed from sample
Independent Self-
Service Cafeterias
Self-Service Cafeterias
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
'000 transactions
2005 2006 2007 2008 2009 2010
Chained Self-Service
Data removed from sample
Cafeterias
Independent Self- 2
Service Cafeterias
Self-Service Cafeterias 2, , , , , ,
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
A$ million
2005 2006 2007 2008 2009 2010
% Units/Outlets growth
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% transaction growth
2009/10 2005-10 CAGR 2005/10 TOTAL
% value growth
2009/10 2005-10 CAGR 2005/10 TOTAL
% value
Company 2006 2007 2008 2009 2010
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
% value
Brand Global Brand Owner 2007 2008 2009 2010
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
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outlets
2010 2011 2012 2013 2014 2015
'000 transactions
2010 2011 2012 2013 2014 2015
A$ million
2010 2011 2012 2013 2014 2015
Chained Self-Service
Cafeterias Data removed from sample
Independent Self-
Service Cafeterias
Self-Service Cafeterias
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
% Units/Outlets growth
2010-15 CAGR 2010/15 TOTAL
% transaction growth
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% value growth
2010-15 CAGR 2010/15 TOTAL
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STREET STALLS/KIOSKS IN
AUSTRALIA - CATEGORY ANALYSIS
HEADLINES
Street stalls/kiosks grow 3% in current value terms in 2010 to reach A$2.5 billion
Outlet numbers increase 2% to reach 9,187
Donut King, Boost Juice and Muffin Break lead the street stalls/kiosks with 18%, 16% and
15% value market share respectively
Street stalls/kiosks expected to see -1% constant value CAGR over the forecast period
TRENDS
Value growth for street stalls/kiosks fell from 4% in 2009, down to 3% in 2010, to reach
A$2.5billion. This cause of this slowing in growth can be attributed to conditions in the
primary location of street stalls/kiosks; as kiosks in Australia’s extensive collection of shopping
centres, either as stand-alone kiosks or as part of a food court. Australian retail slowed in
2010, as consumer confidence was shaky, and retail traffic through shopping centres
weakened.
Food courts, found in all but the smallest of shopping centres, consist of a collection of
consumer food operators, usually in a semi-circle with collective seating, and offering one of
each form of popular cuisine, typically pizza, chicken, Thai, Chinese, Japanese, sandwiches,
kebabs, and a couple of major fast food chains such as McDonalds, Subway, and KFC
(although for simplicities sake and since only a small proportion of outlets for these particular
brands are found in food courts, we have counted their market shares in their own primary
categories, that is burger fast food, bakery fast food and chicken fast food respectively).
Whilst many of these outlets are independents – particularly in relation to Asian cuisines
which have yet to consolidate around one particular brand – the desire of aspiring chains to
expand their presence through food-courts, means that independents are increasingly being
squeezed out.
Growth in outlet numbers have also remained low, although at 2% in 2010 this is larger than
the 1% of 2009. The primary reason of this slow growth has been the lack of appetite for
investing in new shopping centres by property developers, partially due to the lacklustre
performance of retail spending and partially due to the reluctance of banks to lend during a
time of economic uncertainty. Some growth has continued however due to the completion of
construction of shopping centres that had been committed to prior to the economic slowdown.
Most growth however, in relation to outlet numbers, has come from other sources, outside of
retail locations. This source of growth has been the expansion of chains connected to coffee,
such as mobile coffee brand Cafe2U and drive-thru coffee chain Muzz Buzz. The expansion
of these chains is primarily achieved through franchising, and with relatively low franchise
fees – A$125,000 in the case of Cafe2U – it is a franchising concept that can expand rapidly.
The low franchise fees also mean that existing franchisees can easily expand their
businesses through additional franchises, creating a further source of growth.
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The remainder of the street stalls/kiosks market in Australia is fragmented, made up of ice
cream vans, mobile consumer foodservice operators specializing in music festivals, and
kebab vans, the later of which are particularly popular in Me bourne.
Mobile vans are often used for branding purposes, with Grill’d using a van for its “Burger Love
Tour” including appearances at music festivals including the Big Day Out and Good
Vibrations. While likely to grow in importance as a means of branding for youth-oriented
brands, this would only be applicable for such brands and is therefore l kely to remain a niche
strategy.
COMPETITIVE LANDSCAPE
With outlets in virtually every major Australian shopping centre, Donut King, Boost Juice and
Muffin Break are the largest players in street stalls/kiosks in Australia, with 18%, 16% and
15% value market share respectively, with Wendy’s Supa Sundaes close behind at 12%.
Each of these brands have slipped downwards in 2011, as consumers have stayed away from
shopping centres and therefore the kiosks of these brands. Instead it has been the coffee-
related and non-retail location based brands that have experienced the strongest growth.
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PROSPECTS
The slump that Australian retail has experienced over 2010 and 2011, is likely to continue as
Australian consumers stay away from shopping centres and decide instead to save.
Alternatively, on those occasion when Australian consumers wish to make a purchase, they
shall be increasingly l kely to make the purchase online. Either way, the amount of foot traffic
in Australian shopping centres, upon which street stalls/ kiosks rely, shall continue to be
subdued over the forecast period, experiencing a negative constant value CAGR of -1%.
CATEGORY DATA
Table 1 Street Stalls/Kiosks: Units/Outlets 2005-2010
outlets
2005 2006 2007 2008 2009 2010
Street Stalls/Kiosks
Chained Street Stalls/ Data removed from sample
Kiosks
Independent Street
Stalls/Kiosks
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
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'000 transactions
2005 2006 2007 2008 2009 2010
Street Stalls/Kiosks
Data removed from sample
Chained Street Stalls/
Kiosks
Independent Street
Stalls/Kiosks
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
A$ million
2005 2006 2007 2008 2009 2010
Street Stalls/Kiosks
Data removed from sample
Chained Street Stalls/
Kiosks
Independent Street
Stalls/Kiosks
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
% Units/Outlets growth
2009/10 2005-10 CAGR 2005/10 TOTAL
Street Stalls/Kiosks
Chained Street Stalls/Kiosks
Data removed from sample
Independent Street Stalls/Kiosks
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
% transaction growth
2009/10 2005-10 CAGR 2005/10 TOTAL
% value growth
2009/10 2005-10 CAGR 2005/10 TOTAL
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% value
Brand Global Brand Owner 2007 2008 2009 2010
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outlets
2010 2011 2012 2013 2014 2015
'000 transactions
2010 2011 2012 2013 2014 2015
Street Stalls/Kiosks
Chained Street Stalls/ Data removed from sample
Kiosks
Independent Street
Stalls/Kiosks
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
A$ million
2010 2011 2012 2013 2014 2015
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% Units/Outlets growth
2010-15 CAGR 2010/15 TOTAL
% transaction growth
2010-15 CAGR 2010/15 TOTAL
% value growth
2010-15 CAGR 2010/15 TOTAL
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CONSUMER FOODSERVICE BY
LOCATION IN AUSTRALIA -
CATEGORY ANALYSIS
HEADLINES
TRENDS
Standalone locations remained dominant in 2010, making up 70% of outlets – a figure that
edged down slightly, as consumer foodservice operators, continued to be attracted to retail
locations. The number of retail locations is limited, however, and instead the vast majority of
consumer foodservice outlets are in standalone environments such as the high streets of
Australian towns and suburbs.
Whether or not to choose a retail location or a standalone location often comes down to
whether the outlet in question is part of a chain. Independents tend to prefer standalone
locations, catering to the local community, while avoiding high rental costs. Chains,
particularly rising chains, prefer the exposure that comes from a retail location. In fact it is fair
to say that the spectacular growth of franchise chains in consumer foodservice over the
2000s, and the equally spectacular growth of retail locations, such as those developed by
Westfield, Centro and Australand, correlate to each other, with retail locations making up 14%
of outlet numbers in 2010, up from 11% in 2000.
There are exceptions, however, as any chain that has a drive-thru component – including the
major fast food brands such as McDonald’s and Hungry Jack’s – requiring a standalone
location, while Subway has made a virtue of its relatively small outlet sizes to squeeze its
establishments into a wider range of locations, including outside of retail.
Cafés/bars also have a strong preference for standalone locations, as each Australian town
and suburb attempts to recreate the “café culture”, with cafés increasingly lining every high
street. It is far easier for cafés to obtain a standalone location, due to closures of many local
stores such as butchers and greengrocers due to competition from the two major supermarket
chains, Coles and Woolworths, which increases the amount of vacant space available.
Those consumer foodservice outlets in “retail” typically perform according to how much footfall
their locations receive. As the economic slowdown has discouraged consumers from
shopping in department stores and holding off on clothing purchases, there has been a similar
depressing effect on consumer foodservice within retail locations.
Reflecting this was a stagnation of retail development over 2009 and 2010, although projects
that were initiated prior to the economic slowdown have continued. The result is that retail
locations increased by 2% in terms of outlets in 2010.
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Consumer foodservice in retail tends to have a female skew, since shopping centres are more
focused on attracting female customers, with women’s clothing stores etc. Women tend to be
drawn more towards healthy eating options, which is why brands such as Sumo Salad and
Healthy Habits have focused on expansion through such shopping centres. As most shopping
centres are not open in the evening, their offerings tend to be skewed towards lunch. This
further suits such healthy fast food and sandwich-related fast food outlets as Sumo Salad and
Healthy Habits. Such expansion was tempered by the slow market in retail in 2010, however,
due to the economic slowdown.
Retail locations still provide greater turnover than standalone, since it offers a high level of
traffic. Retail property developers understand this and have been assertive in pushing up
rents, which has in turn squeezed profit margins for consumer foodservice players. This is
emphasised by the fact that outlets typically have limited hours of operation, limited largely to
lunch.
The focus on retail by most fast food retailers has been used as an opportunity by Subway,
which has instead achieved much of its expansion through standalone locations. The small
size of Subway outlets means its establishments can fit into a more diverse variety of
locations, which would be too small for most other fast food outlets. This is because the food
is prepared in front of consumers and not in a kitchen, thereby reducing Subway’s retail
footprint. A similar strategy has been used by Spudbar, which likewise have expanded into
small retail spaces where other fast food outlets cannot fit.
The decline in the number of consumers through shopping centres – something that is largely
beyond the control of consumer foodservice players – has served to reinforce the need to
encourage consumers to spend more per transaction. This has increased the focus on
“gourmet” offerings, in the hope that consumers will spend an extra dollar or two.
COMPETITIVE LANDSCAPE
The leading brands in concession operators are typically the same as those elsewhere,
particularly in the case of airports, in which the foodservice offerings closely resemble those
seen in most popular retail locations. Universities, being controlled in the main by left-leaning
student unions, have typically been distrustful of multinationals and chains in general, and are
therefore largely catered to by independents. The main exception is Aroma Café, based in
Western Australia, but whose outlets outside that state are almost exclusively in universities
and Technical and Further Education (TAFE) campuses.
PROSPECTS
The appetite of retail developers for new developments has fallen off since the global financial
crisis, and with credit lending tight, has not yet recovered. This has not impacted upon
consumer foodservice as yet, since new shopping centres, planned prior to the global
financial crisis, are still being completed. It will, however, have a significant impact going
forward, putting the brakes on the expansion plans of franchises. Once consumer spending
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returns, there will be a lag of a few years until retail developments pick up again. Until this
occurs, most likely towards the end of the forecast period, vacant spaces in shopping centres
will be difficult to come by, and be subject to rising rents. Consumer foodservice operators will
need to focus on alternative locations, most notably standalone.
CATEGORY DATA
Table 1 Consumer Foodservice Sales by Location: Units/Outlets 2005-2010
outlets
2005 2006 2007 2008 2009 2010
Consumer Foodservice
Through Standalone Data removed from sample
Consumer Foodservice
Through Leisure
Consumer Foodservice
Through Retail
Consumer Foodservice
Through Lodging
Consumer Foodservice
Through Travel
Consumer Foodservice
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
Mn transactions
2005 2006 2007 2008 2009 2010
Consumer Foodservice
Through Standalone Data removed from sample
Consumer Foodservice
Through Leisure
Consumer Foodservice
Through Retail
Consumer Foodservice
Through Lodging
Consumer Foodservice
Through Travel
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A$ million
2005 2006 2007 2008 2009 2010
Consumer Foodservice
Through Standalone Data removed from sample
Consumer Foodservice
Through Leisure
Consumer Foodservice
Through Retail
Consumer Foodservice
Through Lodging
Consumer Foodservice
Through Travel
Consumer Foodservice , , , , , ,
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
% Units/Outlets growth
2009/10 2005-10 CAGR 2005/10 TOTAL
% transaction growth
2009/10 2005-10 CAGR 2005/10 TOTAL
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% value growth
2009/10 2005-10 CAGR 2005/10 TOTAL
outlets
2005 2006 2007 2008 2009 2010
Mn transactions
2005 2006 2007 2008 2009 2010
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Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
A$ million
2005 2006 2007 2008 2009 2010
% Units/Outlets growth
2009/10 2005-10 CAGR 2005/10 TOTAL
% transaction growth
2009/10 2005-10 CAGR 2005/10 TOTAL
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% value growth
2009/10 2005-10 CAGR 2005/10 TOTAL
outlets
2005 2006 2007 2008 2009 2010
'000 transactions
2005 2006 2007 2008 2009 2010
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Cafés/Bars Through
Leisure Data removed from sample
Fast Food Through Leisure
Full-Service
Restaurants Through
Leisure
Self-Service Cafeterias
Through Leisure
Street Stalls/Kiosks
Through Leisure
Consumer Foodservice
Through Leisure
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
A$ million
2005 2006 2007 2008 2009 2010
% Units/Outlets growth
2009/10 2005-10 CAGR 2005/10 TOTAL
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% transaction growth
2009/10 2005-10 CAGR 2005/10 TOTAL
% value growth
2009/10 2005-10 CAGR 2005/10 TOTAL
outlets
2005 2006 2007 2008 2009 2010
Mn transactions
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A$ million
2005 2006 2007 2008 2009 2010
% Units/Outlets growth
2009/10 2005-10 CAGR 2005/10 TOTAL
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% transaction growth
2009/10 2005-10 CAGR 2005/10 TOTAL
% value growth
2009/10 2005-10 CAGR 2005/10 TOTAL
outlets
2005 2006 2007 2008 2009 2010
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'000 transactions
2005 2006 2007 2008 2009 2010
A$ million
2005 2006 2007 2008 2009 2010
% Units/Outlets growth
2009/10 2005-10 CAGR 2005/10 TOTAL
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% transaction growth
2009/10 2005-10 CAGR 2005/10 TOTAL
% value growth
2009/10 2005-10 CAGR 2005/10 TOTAL
outlets
2005 2006 2007 2008 2009 2010
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Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
'000 transactions
2005 2006 2007 2008 2009 2010
A$ million
2005 2006 2007 2008 2009 2010
% Units/Outlets growth
2009/10 2005-10 CAGR 2005/10 TOTAL
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% transaction growth
2009/10 2005-10 CAGR 2005/10 TOTAL
% value growth
2009/10 2005-10 CAGR 2005/10 TOTAL
outlets
2010 2011 2012 2013 2014 2015
Consumer Foodservice
Through Standalone Data removed from sample
Consumer Foodservice
Through Leisure
Consumer Foodservice
Through Retail
Consumer Foodservice
Through Lodging
Consumer Foodservice
Through Travel
Consumer Foodservice
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Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
Mn transactions
2010 2011 2012 2013 2014 2015
Consumer Foodservice
Through Standalone Data removed from sample
Consumer Foodservice
Through Leisure
Consumer Foodservice
Through Retail
Consumer Foodservice
Through Lodging
Consumer Foodservice
Through Travel
Consumer Foodservice
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
A$ million
2010 2011 2012 2013 2014 2015
Consumer Foodservice
Through Standalone Data removed from sample
Consumer Foodservice
Through Leisure
Consumer Foodservice
Through Retail
Consumer Foodservice
Through Lodging
Consumer Foodservice
Through Travel
Consumer Foodservice , , , , , ,
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
% Units/Outlets growth
2010-15 CAGR 2010/15 TOTAL
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Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
% transaction growth
2010-15 CAGR 2010/15 TOTAL
% value growth
2010-15 CAGR 2010/15 TOTAL
outlets
2010 2011 2012 2013 2014 2015
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Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
Mn transactions
2010 2011 2012 2013 2014 2015
A$ million
2010 2011 2012 2013 2014 2015
% Units/Outlets growth
2010-15 CAGR 2010/15 TOTAL
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% transaction growth
2010-15 CAGR 2010/15 TOTAL
% value growth
2010-15 CAGR 2010/15 TOTAL
outlets
2010 2011 2012 2013 2014 2015
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Restaurants Through
Leisure
Data removed from sample
Self-Service Cafeterias
Through Leisure
Street Stalls/Kiosks
Through Leisure
Consumer Foodservice
Through Leisure
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
'000 transactions
2010 2011 2012 2013 2014 2015
A$ million
2010 2011 2012 2013 2014 2015
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% Units/Outlets growth
2010-15 CAGR 2010/15 TOTAL
% transaction growth
2010-15 CAGR 2010/15 TOTAL
% value growth
2010-15 CAGR 2010/15 TOTAL
outlets
© Euromonitor International
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Mn transactions
2010 2011 2012 2013 2014 2015
A$ million
2010 2011 2012 2013 2014 2015
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% Units/Outlets growth
2010-15 CAGR 2010/15 TOTAL
% transaction growth
2010-15 CAGR 2010/15 TOTAL
% value growth
2010-15 CAGR 2010/15 TOTAL
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outlets
2010 2011 2012 2013 2014 2015
'000 transactions
2010 2011 2012 2013 2014 2015
A$ million
2010 2011 2012 2013 2014 2015
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% Units/Outlets growth
2010-15 CAGR 2010/15 TOTAL
% transaction growth
2010-15 CAGR 2010/15 TOTAL
% value growth
2010-15 CAGR 2010/15 TOTAL
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outlets
2010 2011 2012 2013 2014 2015
'000 transactions
2010 2011 2012 2013 2014 2015
A$ million
2010 2011 2012 2013 2014 2015
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% Units/Outlets growth
2010-15 CAGR 2010/15 TOTAL
% transaction growth
2010-15 CAGR 2010/15 TOTAL
% value growth
2010-15 CAGR 2010/15 TOTAL
Data removed from sample
100% Home Delivery Through Travel
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© Euromonitor International