Taco Bell to hit 100-plus stores in Australia thanks to two new partners

Taco Bell

American fast-food behemoth Taco Bell is evidently enthusiastic about its third attempt at success in the Australian market.

While having failed to secure a foothold Down Under in the 1980s and 1990s, brand owner Yum! is really going for it this time.

There’s likely to be more than 100 Taco Bell stores trading in Australia by the end of 2024 after ASX-listed Restaurant Brands Group yesterday revealed plans to open 60 in NSW, Canberra and New Zealand.

“We have signed a development agreement to bring this iconic brand to New Zealand and New South Wales and ACT in the Australian market,” Restaurant Brands chief executive Russell Creedy told investors yesterday.

It follows competitor Collins Food Group’s announcement last year it would open 50 Taco Bell stores in Australia by 2021, with four locations already trading in Queensland and more to come in Victoria.

Restaurant Brands, which already operates Taco Bell locations in Hawaii, yesterday described its rollout plans as “aggressively paced”, saying the first stores will open later this year.

Both businesses have deals to sub-franchise the business locally, which could drive an even bigger explosion in stores over the coming years.

The strategy contrasts previous attempts to make Taco Bell work in Australia, indicating Yum! has adopted a scattergun approach this time around, opting for a strategy that plasters its brand across the country as quickly as possible.

That makes sense in the context of local market trends, with Mexican cuisine enjoying an explosion in popularity in Australia in recent years.

Brands such as Guzman Y Gomez, Mad Mex and Zambrero are already cashing in on the taco gold rush, although Taco Bell, which has more than 7,000 locations in the US, represents a competitive threat.

Retail Doctor Group chief executive Brian Walker says the addition of more than 100 Taco Bell locations will create cannibalisation in the market.

“Taco Bell will very consciously put themselves into those precincts where competitors are,” he tells SmartCompany.

Walker says having two separate and competing companies rollout Taco Bell in Australia at the same time does present a challenge, but not one that can’t be overcome.

“It’s not perfect, but they’ll overcome that over time … these businesses are very prescriptive in the way they set their standards,” he says.

Taco Bell targets a lower price point than most established players in the category locally, which serves to differentiate it from existing players here.

Retail experts say neither Collins or Restaurant Brands will look to make too many changes to the American model.

“This will be a plug-and-play situation. The model has worked successfully in America: big meals low prices,” Queensland University of Technology’s Gary Mortimer has told SmartCompany.

Late last month, Collins Foods’ managing director and chief executive Graham Maxwell said its own operation is performing “in line” with expectations.

“Taco Bell continues to trade in line with expectations, with great value products and contemporary restaurant designs resonating well with our customers,” he told investors.

“We have now successfully opened four Taco Bell restaurants in Queensland, and continue to work on developing the pipeline for sites, with 10 restaurants planned for opening before the end of the year, including the planned entry into Victoria in early-2020.”

NOW READ: Third time’s the charm: Chain to open 50 stores in Australia in third attempt at expansion Down Under

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