Taco Tuesday is on the scrapheap as chicken dinners remain a winner for Aussie fast-food fans.
KFC owner Collins Foods will exit its struggling Taco Bell business in Australia and expand Colonel Sanders’ footprint in Germany as part of a major strategic shake up.
The organisation is in talks with Taco Bell International to find a buyer for the Australian business, after failing to make inroads against competitors Guzman Y Gomez and similarly named Taco Bill.
“As part of our commitment to sharpen our focus and align resources to profitable growth, we have made the decision to exit the Taco Bell business.,” Collins Foods chief executive and managing director Xavier Simonet told an investor call.
“We will continue to deliver high-quality food at accessible prices, leveraging the heritage of the KFC brand at a time when consumer trust has never been more important.”
Collins’ nearly 30 Taco Bell restaurants were behind a $36.7 million impairment on the organisation’s balance sheet in 2023.
The restaurant chain’s earnings before interest, tax and depreciation were down 1.3 per cent in 2024, after falling 3.2 per cent the year before.
As it looks to offload one chain, Collins is planning 40 to 70 new KFC stores in Germany, where it operates more than 200 outlets in an agreement with KFC parent and US multinational YUM Brands Inc.
“We are excited about accelerating expansion into Germany where the market remains under-penetrated, offering a clear runway for growth,” Mr Simonet said.
“Our partnership with YUM will fast-track our ability to scale in Europe, and we remain open to broader opportunities in this region.”
YUM has given Collins a period of exclusivity within certain trade zones in North Rhine Westphalia and Baden-Württemberg, the two regions home to 35 per cent of Germany’s 80 million population.
Cost pressures, labour costs and development roadblocks have capped success in the Netherlands, where restaurant numbers are expected to remain steady ahead of an expected impairment of between $25.5 million to $32.7 million flagged for June’s full-year results.
Australia remained the group’s key growth market, but given KFC’s already high proliferation Down Under, Mr Simonet was wary of cannibalising existing stores.
Collins Foods also announced a raft of executive changes, with KFC Australia chief operating officer Helen Moore stepping down after four years.
Taco Bell general manager and interim KFC Australia general manager Krystal Zugno will lead operations for both brands as general manager of Australian operations.
Hans Miete has stepped down as the group’s Europe chief executive, with Europe chief operating officer Chris Johnson to act as general manager until Mr Miete’s replacement is found.
Investors were uninspired by Tuesday’s investor call and CKF shares were trading 6.9 per cent lower for the day to $8.08 just before 2pm AEST.
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