Chicken sales are down as costs bite

Times are tough when the cheapest treat or night out for a family – a bucket of KFC chicken or a McDonald’s family dinner – is off the menu, but that’s the shocking news federal MPs have been delivered.

KFC has reported customers were cutting back on spending in May and June, with same-store sales down 0.8 per cent compared with the same time a year ago.

Times are tough when the cheapest treat or night out for a family on a Friday or Saturday – a bucket of Kentucky Fried Chicken or a McDonald’s family dinner – is off the menu, but that’s the shocking news federal MPs have been delivered.

Consumption of chicken, the cheapest, most popular protein for Australians, who eat 50kg each a year, is down for the first time in decades, and falling sales at KFC and McDonald’s is being seen as a big contributing factor.

MPs at a Parliament House lunch on Tuesday to promote chicken production and consumption with a celebrity chef were told retail research suggested people were visiting KFC and McDonald’s less and were spending less when they did have a night out.

Despite decades of steady growth in chicken consumption MPs were told there was a significant downturn of “high single figures” – between 5 and 9 per cent – in chicken sales at the ­retail outlets. MPs were also told cutting back on takeaway food was a result of families prioritising “paying the mortgage or the power bill”.

Australia’s biggest chicken producer, Ingham’s, is expected to confirm the fall in consumption in its annual report on Friday. Nationals MP for Hinkler in Queensland, Keith Pitt, said in poorer electorates like his, a Friday night dinner at KFC or McDonald’s was the equivalent of a luxury night out for some.

“Normally as you go around on a Friday or Saturday night the KFC and McDonalds’ drive throughs and restaurants are packed, the queues come out into the street,” he told The Australian on Wednesday. “But not now, they’re deserted. I said publicly recently that the cost of gas was making it difficult to cook a steak and I had people saying they couldn’t afford a steak or to eat out and were buying frozen pies and sausage rolls.”

Globally McDonald’s has recorded its first drop in sales in nearly four years, as customers cut back on takeaway because of the cost-of-living crunch.

According to the McDonald’s figures, sales at locations open for at least a year fell 1 per cent over the April-June period compared with a year earlier.

This was the first decline for McDonald’s since the pandemic.

Collins Foods, which operates 279 KFC outlets in Australia, has reported customers were cutting back on spending in May and June, with same-store sales down 0.8 per cent compared with the same time a year ago.

When the KFC decline was reported, interim chief executive Kevin Perkins said the tougher trading conditions would continue well into 2025.

Mr Perkins said KFC customers were battling higher mortgage rates, rents and energy bills, and feeling the impact of inflation. “Significant cost-of-living and inflationary pressures are expected to remain for much of the year ahead, impacting sales growth, and we expect margin pressure across the group,” he said last week. KFC would look at more “bundling” of menu items in special offers, to help families under pressure.

“You could say transactions are stabilising, but people are spending less,” Mr Perkins said.

The latest Australian Bureau of Statistics on retail trade show that there was zero growth in spending on restaurants, cafes and takeaway compared with an overall growth in retail trade of 0.5 per cent.

According to the ABS, spending on takeaway food in June fell 0.2 per cent – $4.3m – although there was a 0.1 per cent rise for restaurants.

The chief executive of the Australian Chickenmeat Federation, Mary Wu, who was at the function at a Parliament House, said there was anecdotal evidence that there was a decline in chicken consumption in the “short term”. Dr Wu said chicken was a popular protein choice for families and it had kept price rises at a minimum for decades.