Lovers of Mexican fast food are getting fired up by yet another option hitting the Australian scene, with billion dollar brand Taco Bell set to take over an abandoned Sizzler store in Queensland next month.
News.com.au reports this will be the brand’s third attempt to crack the Australian market, having given things a shot in the 1980s but had to exit after a trademark dispute with another Sydney restaurant, Taco Bell’s Casa.
It tried again in the 1990s, when it had a store in Sydney’s George Street between 1997 and 2005.
Taco Bell was founded in 1954 in San Bernadino and is now owned by billion dollar US food conglomerate Yum Brands. The Australian licence for Taco Bell is owned by Collins Foods Limited, an ASX-listed company which also operates KFC and Sizzler.
Get daily business news.
The latest stories, funding information, and expert advice. Free to sign up.
In a statement to SmartCompany, a spokesperson for Collins Foods confirmed it was currently recruiting for a Taco Bell store in Queensland, and further details about plans for the brand will be revealed closer to the store’s opening.
“Collins Foods Limited will open a Taco Bell restaurant later this year at Annerley in Brisbane on the site of its former Sizzler restaurant,” the spokesperson said.
The news opens up new possibilities for Sizzler sites, after Collins announced in its annual results this year it considered Sizzler a non-core business in Australia, and was instead focusing on the Asian region for the brand. Collins closed six Sizzler sites last year, and there are 16 remaining across the country.
However, Taco Bell will make a tilt at the $19.3 billion fast food market at an incredibly competitive time for fast casual dining, and Mexican dining in particular. Competitors in the space include Zambrero, Mad Mex, Guzman y Gomez and Salsa’s Fresh Mex Grill, the Mexican chain owned by Janine Allis’ Retail Zoo.
When contacted for comment on Taco Bell’s launch this morning, chief executive of Mexican chain Zambrero, Karim Messih, said his brand had a unique take on the cuisine that had contributed to the growth of 150 stores.
“We’ve seen the number of Mexican food lovers in Australia boom in recent times and the space is still growing rapidly,” Messih said.
The most recent IBISWorld stats on the space also suggest that despite tastebuds moving towards a more up market “fast casual” dining setup, the bulk of the spending on fast food in Australia still lies with big US brands.
In 2016-17, McDonald’s Australia was the market leader, capturing 20.2% of Australians’ overall spend, while Subway takes 7.4% and 5% for Domino’s Pizza.
Taco Bell has already laid the social media groundwork for its launch, which according to a countdown on its Australian website will happen at the start of October.
In a statement on the website, a spokesperson for Taco Bell said Queensland had been chosen as the first location for a new Taco Bell store because of “the people, the lifestyle, the laidback-ness, it’s our own Cali down under”.
With competitors moving in, where to go?
Australia’s Mexican fast food incumbents will have a challenge ahead of them given Taco Bell’s imminent arrival, says Michelle Gamble, director of Marketing Angels.
“There will always be a curiosity around a brand like Taco Bell,” Gamble says.
However, she believes the players that already inhabit that segment of the market have the power to maintain customer loyalty, provided they play to their strengths.
“I think they’re well positioned to deal with it, and I think there is a lot to be said for the Mexican brands in Australia, and brands have done a lot around things like making sure chicken is free range,” she says.
In September 2016, $150 million chain Guzman y Gomez made a pledge to use 100% free range chicken in its menu items.
Other competitors like Zambrero have social enterprise projects on the go that founder Dr Sam Prince has previously told SmartCompany contributes to authenticity within the brand.
Gamble believes authenticity is a key element of fighting new competitors in a marketplace, but fast food businesses should be locking their customer’s loyalty into place as soon as possible.
“If you [are in this space] and don’t have a loyalty program in place, you want to get that sorted now. It’s about making sure people have a really strong reason to come back to you.”
Never miss a story: sign up to SmartCompany’s free daily newsletter and find our best stories on Twitter, Facebook, LinkedIn and Instagram.