Taco Bell’s plan to take over
A FAST food brand Australians have barely heard of is on a mission to be as big as KFC. But a well-known Australian dining name, enjoyed by generations, is likely to be sacrificed in the process.
Tex-Mex global goliath Taco Bell has quietly opened a single test store in Australia. Now the brand's operators say the outlet in Annerley, Brisbane has been such a success it's full steam ahead to start rolling out the takeaway chain nationwide. It could see the few remaining Sizzlers disappear, only to reopen as Taco Bells.
An industry analyst has said it's a risky move given this will be Taco Bell's third attempt at cracking Australia and the fast food sector is already "saturated".
Australians spend $20 billion annually on fast food and the industry employs some 152,000 people, according to market researchers Ibis World. The biggest brands are Domino's, McDonald's and Subway.
Worldwide, Taco Bell serves more than two billion customers a year from San Francisco to Shanghai. The cheap and cheerful menu features burritos and nachos, and, just for Australian diners, bottled beer.
Although owned by US chain Yum! Brands, once part of Pepsi, Brisbane-based Collins Foods has the Australian rights to Taco Bell. The company is also Australia's largest franchisee of KFC, also ultimately owned by Yum!.
On Tuesday, Collins announced a 21.7 per cent profit jump to $32.5 million for the year.
While KFC is Collins' main play, Taco Bell has now been set on a path to growth, said chief executive Graham Maxwell.
"We are pleased with the acceptance of the Taco Bell brand by Australian consumers. We have entered an exciting new phase with the successful launch of our first Taco Bell restaurant, with further restaurants to follow over the next 12 months."
The first new stores are due to open before the end of the year.
FAST FOOD SATURATED
Ibis World senior industry analyst Bao Vuong told news.com.au it was going to be hard for Taco Bell to muscle into the Australian market.
"Fast food is extremely competitive with lots of options. The landscape is more saturated and it's harder for fast food operators to stand out.
"Taco Bell have unsuccessfully tried to expand into Australia before but I think people are now more embracing of international cuisines, especially Mexican, so it's an untapped market and there is potential for it to succeed," Mr Vuong said.
But just as we are saying hola to Taco Bell, we're saying see ya to Sizzler, also owned by Collins.
The steak and seafood sit-down restaurant, that was once a go-to treat for Aussie families, is a shadow of its former self.
Collins said revenue at the chain, famous for its cheese toast, was down 22 per cent and just 13 stores remained open, a reduction of three on the previous year. Most of these are in Queensland with one in NSW and a smattering in Western Australia.
Mr Vuong said Sizzler had become stale to Australian diners.
"Sizzler hasn't done well because consumers have now embraced new types of products, like food vans and pop-up restaurants, and Sizzler doesn't stand out, it stands for something generic."
The company, somewhat enigmatically, said, "Sizzler continues its transition". Collins would not elaborate to news.com.au as to what that transition was or whether it was code for closing the remaining stores down.
However, there's a clue in Brisbane. Annerley, in the city's south, used to sport a Sizzler until July last year. Now, it's the location of Australia's only Taco Bell, a snazzy store with exposed pipes and walls daubed with street art. Each Sunday, bands play among the burritos.
There customers can enjoy a cheesy gordita crunch featuring both a taco and flatbread stuffed with beef, a cantina power bowl with black beans and guacamole, and a "chocodilla snackarito", a tortilla filled with melted chocolate.
The Australian offer seems fancier than the US arm, which has 7000 locations. Stateside the menu is far larger, including a dizzying array of neon-coloured slushies, a breakfast "crunchwrap" and low-priced items for just one dollar including a "cheesy roll-up" which is simply a flatbread with melted cheese inside.
THIRD TRY AT AUSTRALIA
Mr Vuong said Sizzler may have been in Australia longer but the sheer global pulling power of the Taco Bell name meant it had far bigger brand power.
"This is a good move by Collins Foods as Sizzler is far less well-known than Taco Bell."
Despite the likes of Guzman Y Gomez and Mad Mex already in the Mexican space, he said Taco Bell's takeaway focus could help it find a space.
You have to give Taco Bell marks for trying when it comes to Australia. This is its third attempt to win us over with keenly priced quesadillas and bargain burritos.
The American chain first tried to break into Australia's tricky fast food market in the early '80s but withdrew after it was ordered to change its name as it conflicted with a Sydney restaurant called Taco Bell's Casa.
It returned in 1997 with a store in Sydney's CBD but by 2005, the chain had left the country again.
So where could Taco Bell pop up next? Collins wouldn't let on to news.com.au when, or even if, the remaining Sizzlers would close.
But if they accelerate the transition of the remaining locations, Taco Bell could soon be seen in Campbelltown in NSW, Innaloo in Western Australia and Rockhampton, Toowoomba, Caboolture and Ipswich in Queensland.
But for Sizzler fans, it's not all bad news. Collins has no plans to ditch the name altogether. In fact, one part of Sizzler is on a roll with a 10 per cent rise in revenue. The only glitch for Aussie fans? It's Sizzler Asia.
In the future, if you want to enjoy your cheese toast, you may have to head to Thailand, Japan or China. But if you want Mexican, stay right here.