KFC franchisor Collins Foods will resist hiking prices despite mounting cost pressures

The head of the operator of the popular fried chicken chain is resisting one thing as Aussies feel hip-pocket pain.

The head of KFC restaurants in Australia maintains the fast-food chain is committed to value and will resist increasing menu prices in the immediate future despite inflationary pressures.

“KFC’s continued market leadership in value, quality and taste metrics has validated its strategy to prioritise long-term brand health over short-term margin pressures,” said Collins Foods managing director and chief executive Drew O’Malley in a release to the ASX on Tuesday.

“We recognise that today’s consumers are facing unprecedented conditions, and by keeping menu prices highly competitive, we continue to re-earn the trust that consumers have built in the KFC brand.

Collins Foods, which runs KFC in Australia, on Tuesday reported revenue was up 14.1 per cent in the year to April. Picture: NCA NewsWire / Flavio Brancaleone

“We will continue to ensure that KFC is synonymous with value as we move into an even more challenging retail environment, attracting customers trading down from more expensive options and re-engaging light and lapsed users.”

The comments come as Collins Foods, which also operate Taco Bell in Australia, reported revenue for the year to April 30 of $1.348bn, a rise of 14.1 per cent.

However, full-year net profit dropped 76.7 per cent to $12.746m.

“Inflationary pressures are still a very real part of our landscape,” Mr O’Malley said.

“While some commodities are stabilising, there can be a lag before some of this flows through to input costs, and we expect margin pressures to persist for much of (the year to April 30, 2024).

The head of the fried chicken chain in Australia has maintained his company’s commitment to value for customers. Picture: Getty Images/ Justin Sullivan

“Though we certainly have a strong program of initiatives in place to address this … we will continue to manage this business for the long term, prioritising brand health via providing exceptional value for consumers, which we believe will become even more critical in the year to come.”

Mr O’Malley acknowledged that Australians continued to struggle with cost of living pressures off the back of 12 interest rate rises in the past 13 RBA board meetings.

Collins Foods operates 272 KFC stores in Australia and 64 in Europe.