KFC franchisor Collins Foods will resist hiking prices despite mounting cost pressures
KFC Australia has made a conscious decision to refrain from hiking its prices to deal with inflationary pressures.
KFC Australia is resisting an increase to menu prices because it wants to be thought of as “great value” as Aussies cut back on spending.
Instead of increasing prices to deal with inflationary pressures, it will cut expenses elsewhere.
Drew O’Malley, the managing director and chief executive of KFC Australia operator Collins Foods, shared the strategy on Tuesday.
He said the company was “very sensitive” to the fact consumers had copped 12 interest rate rises in just over a year.
“When it comes to that area, we move very cautiously. We are going to continue to be customer led in our approach and ensure that we operate within a customer’s definition of what they consider great value,” Mr O’Malley said, according to The Australian.
“Which is why we’re proud that KFC is leading the pack on value right now in the minds of the consumer.
“So we think the decision not to seek a full offset of short term cost pressures via menu pricing has been the right decision for the consumer and the long term health of the brand.”
Collins Foods posted its financial results to the year ending April 30 on Tuesday, with revenue from KFC Australia surpassing $1 billion for the first time – up 10 per cent on the same period the year before.
In the company’s ASX release, Mr O’Malley said the results “validated its strategy to prioritise long-term brand health over short-term margin pressures”.
He said the brand also wanted to attract customers “trading down from more expensive options”.
Collins Foods operates 272 KFC restaurants in Australia and 64 in Europe. It also operates Taco Bell in Australia.
The company announced the sale of its Sizzler restaurants in Asia to Thai company Minor International.
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