Red Rooster closing in on 20-minute delivery

RED Rooster has transformed itself from a “stagnant” old chicken shop to a half a billion-dollar fast-food force rivalling Pizza Hut and Domino’s.

FISH, lamb and even vegetarian options will join Red Rooster’s traditional chicken menu in coming months as the fast-food outlet pushes for a greater slice of Australia’s growing home delivery market.

The 45-year-old chicken shop, which has an existing relationship with online ordering platform Menulog, will also team up with UberEats to expand its reach as it closes in on Pizza Hut for the number two spot.

Red Rooster, founded in the Perth suburb of Kelmscott in 1972, has undergone a major revamp over the past three years under the leadership of chief executive Chris Green, overhauling its “stagnant” stores and menu and embracing home delivery and online ordering platforms.

“We were definitely an early adopter [out of] quick-service restaurants in delivery, but it’s just continued to go from strength to strength,” Mr Green said.

“We’re on our way to being delivery experts [and we’re] very, very close to number two in Australia in sales. Domino’s is the clear number one, Pizza Hut is number two but we are knocking on the door, I would think in the next 12 months.”

Since the launch of delivery at the Baulkham Hills store in Sydney’s northwest three years ago, Red Rooster has grown its revenue from $480 million to an expected $520 million in 2018.

The company now has a fleet of more than 500 bright red delivery cars and is trialling e-bikes in Queensland, with around 300 to roll out in coming months. Last year, it launched a Track Your Driver GPS feature, similar to Domino’s.

Red Rooster founder Peter Kailis with CEO Chris Green.

The company is partnering UberEats to expand its delivery options.

“Probably the big thing is we’ve got better at speed, speed is absolutely critical for the delivery business,” Mr Green said.

“Track Your Driver is a win-win because the customer gets the benefit of knowing exactly where their order is, but for us in particular it’s helped us drive our delivery times down from 40 minutes to below 30 minutes, and some of our better tests are closer to 20 minutes.”

Mr Green said the UberEats partnership had been trialled in 30 stores and would soon be extended across the entire network of more than 360 locations. “The most important thing is we see it as complementary to our system, not a replacement,” he said.

“It’s just giving customers access no matter where they choose to use us, whether that’s RedRooster.com, Menulog or now UberEats. [There is] a bit of resistance from some of the traditional delivery businesses to get involved with aggregators, but you’ve got to be where the customers are.”

The move to embrace third-party ordering platforms is timely, with market research firm IBISWorld identifying the competition from likes of Menulog and UberEats as likely to “further constrain demand growth for takeaway chicken” over the next five years.

Red Rooster this week launched a fish range, including fish and chips, fish wraps fish rolls, and Mr Green said lamb and vegetarian options were coming, as well as delivery-specific desserts and a “whole new range of sides” to complement the roast chicken.

“We’re continually transforming and evolving the menu,” he said. “I think customers are after variety and choice. McDonald’s started off as beef, probably half of what they sell is chicken now. It’s about listening to customers.”

Late last year, Mr Green met with the brand’s 91-year-old founder Peter Kailis to “find out about what his idea was, particularly in the first 10 years” when he went up against the multinational fast-food giants.

“The three key learnings I got off him, number one was around menu and to always be innovating,” Mr Green said. “The reality is Red Rooster did a lot of innovating in the early years, then it was stagnant. Now we’re going back to that period of innovating and evolving the menu.

“Number two would be marketing — his sons were involved in the business as well and did very strong work in those early years — and the third would be cashflow, which is just as critical in the business today, although we have more technology now to help franchisees manage cashflow.”

In a promotional video, Mr Kailis said he was “very pleasantly surprised to see the modern-day Red Rooster has really improved on what we had at the time”.

“Very good machines, very good standards,” he said, adding that he still eats regularly at his local Red Rooster, where he orders the Hawaiian Pack — which he invented.

KFC operator Yum! Brands holds 36.2 per cent of Australia’s $3.4 billion takeaway chicken shop market, according to IBISWorld. Red Rooster parent Quick Service Restaurant Holdings, which also owns Oporto and Chicken Treat, holds 20.4 per cent.

In addition to the threat from food delivery services, IBISWorld analyst Samuel Johnson said the industry faced “robust” external competition from supermarket chains Coles and Woolworths, which have increased their range of ready-made meals.

“Over the next five years, small industry operators will be forced to differentiate their product offerings, by incorporating gourmet options and healthier alternatives into their range,” Mr Johnson said.

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