Kink in the chain: Industry revenue has declined due to strong external competition

The Chain Restaurants industry operates on a specialised business model that represents a hybrid between traditional restaurants and fast-food services. The concept has proven fairly successful in Australia. However, industry operators have struggled over the past five years due to fierce external competition. Industry revenue is expected to fall at an annualised 1.0% over the five years through 2019-20, to $281.0 million. This trend includes an expected fall of 1.9% in the current year due to a decline in consumer sentiment, which will encourage households to eat meals at home.Chain restaurants tend to fall between fast-food services and traditional restaurants in terms of price. Most industry chains originated in Australia, with international chains having limited more.

Industry Statistics & Market Size
Annual Growth 15-20
Forecast Growth 20-25

Industry Threats & Opportunities

  • Industry operators face high external competition from fast-food services, restaurants and cafes
  • Competition from takeaway and fast-food services, restaurants and cafes is expected to increase
  • Volatile consumer sentiment and changing consumer choices are forecast to constrain revenue growth
  • Industry Report - Industry Investment Chapter

    The Chain Restaurants industry exhibits a low level of capital intensity. For every dollar spent on capital investment in the current year, industry operators are expected to spend an estimated $8.39 on labour costs. Similar to other hospitality industries, chain restaurants are labour intensive, with employees being required to provide food and beverage service, take customer orders, cook and prepare food, and clean kitchen and customer areas.Depreciation costs are relatively low and are typically derived from long-term assets such as ovens, cooking stoves, refrigerators, freezers, dishwashers and other kitchen appliances. The capital intensity of chain restaurants does not tend to vary between establishments as much as it does with traditional restaurants. Thi...purchase to read more.

    Additional Insights for the Chain Restaurants Industry

    IBISWorld has determined the most important Key Success Factors for the Chain Restaurants are:

  • Proximity to key markets
  • Ability to control stock on hand
  • Access to multiskilled and flexible workforce
  • IBISWorld analysts also discuss how external factors such as Real household discretionary income and Consumer sentiment index in the Chain Restaurants industry impact industry performance..

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    What's in this report

    What is the Chain Restaurants Industry?

    The industry comprises sit-down restaurants that provide table service. Industry firms consist of three or more locations. The industry includes licensed restaurants, BYO restaurants, licensed and BYO restaurants, and unlicensed restaurants.

    Industry Products
  • Steaks, burgers and general food
  • Italian food
  • Mexican food
  • Breakfast food
  • Asian food
  • Industry Activities
  • Chain restaurants specialising in steaks, burgers and general food
  • Chain restaurants specialising in Mexican cuisine
  • Chain restaurants specialising in Italian cuisine
  • Chain restaurants specialising in breakfast food
  • Chain restaurants specialising in Asian cuisine
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Real household discretionary income
  • Consumer sentiment index
  • Demand from fast food and takeaway food services
  • Health consciousness

  • Current Performance
  • Caught in the middle
  • Convenience
  • The right market
  • Profitability
  • Chart: Revenue Growth

  • Industry Outlook
  • Demand trends
  • Changing consumer preferences
  • Profitability and

    other trends

  • Table: Chain Restaurants Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Chain Restaurants Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Consumers

  • Key Selling Industries
  • Dairy Produce Wholesaling
  • Fish and Seafood Wholesaling
  • Fruit and Vegetable Wholesaling
  • Liquor Wholesaling
  • Meat, Poultry and Smallgoods Wholesaling

  • Products & Services
  • Steaks, burgers and general food
  • Italian food
  • Mexican food
  • Breakfast food
  • Asian food
  • Chart: Chain Restaurants Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Highest income quintile
  • Fourth income quintile
  • Third income quintile
  • Second income quintile
  • Lowest income quintile
  • Chart: Major Market Segmentation for the Chain Restaurants Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Chain Restaurants

  • Basis of Competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Chain Restaurants Industry

  • Industry Globalization
    Hog's Breath Cafe (Australia) Pty Ltd, Lovely Pancakes Pty Ltd, La Porchetta Holdings Pty Ltd, Taco Bill Mexican,
  • Table: Hog's Breath Cafe (Australia) Pty Ltd - financial performance
  • Table: Lovely Pancakes Pty Ltd - financial performance
  • Table: La Porchetta Holdings Pty Ltd - financial performance
  • Table: Taco Bill Mexican - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Chain Restaurants Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Chain Restaurants Industry
  • Industry Revenue (2011-2025)
  • Industry Gross Product (2011-2025)
  • Establishments (2011-2025)
  • Businesses (2011-2025)
  • Employment (2011-2025)
  • Wages (2011-2025)
  • Wages (2011-2025)
  • Purchases (2011-2025)
  • Profit (2011-2025)
  • Depreciation (2011-2025)
  • Rent (2011-2025)
  • Utilities (2011-2025)
  • Other (2011-2025)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Food Standards Australia New Zealand
  • The agency responsible for developing and administering requirements for food safety and labelling in Australia and New Zealand.
  • Foodie
  • A person with a high level of interest in food, especially in eating or cooking.
  • Traditional Restaurant
  • A single restaurant that provides table service and is not part of a chain of restaurants.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Chain Restaurants market research report can be used to help you: understand market size and growth potential; major companies; draft business plans and pitch books; and conduct benchmarking and SWOT analysis. Our industry analysis highlights macro industry trends in the overall sector and micro trends faced by companies that do business in the industry. The industry report also provides key industry statistics and 5-year forecasts to anticipate future industry prospects so you can decide with confidence.

    IBISWorld industry market research reports enable you to:
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    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
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    This report on Chain Restaurants:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Chain Restaurants market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Chain Restaurants, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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