Fast Food Services industry growth has been solid over the past five years through 2015-16, with revenue forecast to rise by an annualised 2.4%. Fast food revenue is forecast to grow by 1.3% for 2015-16, to reach $14.8 billion.
The projected revenue growth can be attributed to a broader range of healthier fast-food options providing some opportunities for expansion.
According to a recent report, consumers have revised their fast food eating habits and operators have responded by expanding healthy ranges and introducing new products to recapture this market.
Fast Food Operating Landscape
While the industry is considered to be mature, growth in healthy and premium markets has provided an opportunity for new and existing businesses.
Enterprise numbers have increased over the past five years, due to the entry of healthier fast food players.
Industry employment in fast food has trended upwards over the past five years, largely driven by growth in demand for casual positions and more flexible working arrangements.
Fast Food Profit
Fast food operators have focused their efforts on labour costs, as wages account for the second-largest share of revenue.
The wider implementation of casual contracts has increased operator flexibility to reduce staff levels during non-peak periods.
Additionally, a focus on hiring young employees has allowed players to minimise wage bills further, due to the lower award wages for younger age groups.
Increasing premiumisation within the industry has also provided some support for margins, with higher quality products attracting higher prices.
Fast Food Health and Quality
The Fast Food Services industry has been transformed by growing consumer awareness of the importance of healthy eating over the past five years.
Australians have become increasingly health-conscious due to public campaigns discouraging unhealthy lifestyles.
This trend has affected the industry in two ways: driving consumers away from unhealthy options and drawing them towards operators that provide healthy alternatives.
This has led to an increase in the number of fast-food options available to consumers such as healthier eating options, including salad and juice bars and sushi retailers have increasingly infiltrated the Fast Food Services industry.