A full-scale battle is brewing in the fast food industry as Carl’s Jr. aims to regain its foothold in Australia, with major competitors like McDonald’s, Hungry Jack’s, Domino’s, and KFC poised to join the fight.
Market analysts caution that any gap in this fiercely competitive market could be risky for all involved, particularly with the anticipated closure of up to 24 Carl’s Jr. locations and several undeveloped sites expected to become available. An industry source noted that prominent brands like McDonald’s, Hungry Jack’s, and KFC never shy away from competition in their operational areas, and with the rising costs of establishing new stores, some may look to capitalize on the lucrative sites vacated by Carl’s Jr.
“They appear to be in some pretty good locations,” the source said, which could attract competitors to consider taking over the sites.
“Rents have gone up. Tenants have been offering increasing rents to secure new locations. That’s largely a function of the huge cost it takes now to actually open up a brand new store. The build costs are through the roof.” A spokesperson for CKE, the international parent company of Carl’s Jr., confirmed that despite the significant setback caused by the voluntary administration of its Australian master licensee, affecting 24 stores, the company remains committed to expanding in Australia.
“Australia remains a key growth market for CKE, and CKE is excited about the opportunities the country and its consumers offer the brand,” the spokesperson said.
“Global impacts, including inflation, supply chain pressures and shifting consumer behaviour, have challenged some Australia business sectors. However, CKE remains committed.” This commitment will see 25 Carl’s Jr. restaurants, including the newly opened Tarneit store, continue to compete for Australian customers across New South Wales, Victoria, South Australia, and Queensland, with the brand aiming to add more locations soon.
When it comes to pricing, Carl’s Jr. occupies a middle ground among fast food options.
“They’re a higher price point than the usual options that we all know and love, the international groups being McDonald’s and equivalent, but they’re also less expensive than Grill’d,” the industry source added.
“Hungry Jack’s recorded their best year ever last year, so it makes you wonder how did this not go as good? Maybe it’s just because it takes a while to get up and running, get economies of scale and make a profit.”
The Tarneit store, which opened just before the administration notice, remains a key location in Carl’s Jr.’s ongoing efforts to expand its presence in Australia.
