Australia Foodservice Market Size, Share and Forecast Trends - Growth Analysis and Outlook Report (2026-2035)

Market Overview

The Australia foodservice market is growing in value but not evenly. Households still treat eating out as a regular spend, yet they have become selective, trading down to value meals and takeaway while independent venues struggle with labour, rent and ingredient costs.

Three forces are shaping the market: wage and cost pressure on small operators, a drive towards franchised quick service chains with drive-thru and digital ordering, and delivery platforms that widen reach but take a share of every order.

In May 2026 Restaurant & Catering Australia warned the Fair Work Commission that margins were as low as 2.3%, in June 2026 award wages rose 4.75%, and in August 2026 CreditorWatch reported that 12.03% of cafes, restaurants and takeaways stopped trading in the year to July 2026.

Key Market Trends and Insights

• Wage rise bites: The Fair Work Commission lifted modern award wages by 4.75% from 1 July 2026, raising labour costs for restaurants and cafes already reporting margins as low as 2.3%.
• Closures above average: CreditorWatch reported in August 2026 that 12.03% of cafes, restaurants and takeaways stopped trading in the year to July 2026, almost double the national rate.
• Spending stays resilient: NAB data reported in June 2026 showed cafe, restaurant and pub spending up 7.6% over the year, with Western Australia leading at 8.5%.
• Chains keep expanding: Guzman y Gomez opened 35 restaurants in FY26 and reported network sales of AUD 1,377.8 million in August 2026, up 17.9%.

Australia Foodservice Market Size and Forecast

The market is moving from independent, dine-in venues towards franchised chains, drive-thru formats and delivery-led ordering. Full-service restaurants and independent operators still lead in value because of their sheer number of outlets, while quick service restaurants, delivery and franchised chains advance fastest as consumers favour convenience and value. New South Wales remains the largest base, and Western Australia grows quickest from a smaller one. Wage reviews, cost pressure on small venues and steady population growth point to a lasting structural shift in who serves Australian diners, rather than a cyclical uplift, with scale operators and distributors best placed to absorb rising costs.

Key Takeaways: Australia Foodservice Market

Value Growth Outpaces Operator Margins

Revenue is set to rise from AUD 88.00 billion in 2025 to AUD 137.97 billion in 2035 at a 4.6% CAGR, even as wage and rent costs squeeze smaller operators.

Quick Service and Delivery Lead Growth

Full-service restaurants remain the largest segment, but quick service restaurants grow at an estimated 5.8% CAGR and delivery at 7.4% through 2035, backed by drive-thru openings and digital ordering.

Cost Pressure Reshapes the Operator Base

Wage rises, closures and distributor consolidation favour scale operators that can spread labour, purchasing and technology costs across many sites.

• Award wages up 4.75% from 1 July 2026
• 12.03% of venues closed in the year to July 2026
• Domino's planning up to 60 store closures worldwide

Australia Foodservice Market Report Summary

Key Insight

Steady dining-out demand, convenience formats and population growth lift value, while wage and cost pressure thins independent operators. Quick service and delivery grow fastest as chains gain ground.

Key Trends in the Australia Foodservice Market

The Australia foodservice market is being reshaped by venue closures, higher award wages, resilient consumer spending and operator calls for cost relief.

August 2026 - Hospitality Closures Run Well Above the National Rate

• CreditorWatch reported in August 2026 that 12.03% of cafes, restaurants and takeaway businesses stopped trading in the year to July 2026.
• That compared with a 6.69% closure rate across all industries, and 10.21% of sector businesses were more than 60 days in arrears.
• Trade payment defaults in the sector reached 1.15%, against a national average of 0.31% in July 2026.

June 2026 - Fair Work Commission Lifts Award Wages by 4.75%

• The Fair Work Commission's 2026 Annual Wage Review raised modern award rates by 4.75% from the first pay period on or after 1 July 2026.
• The national minimum wage rose to AUD 26.44 an hour, lifting the lowest hospitality classifications to that floor.
• The increase flows through the Hospitality Industry (General) Award and the Restaurant Industry Award, and casual loadings add to the cost.

June 2026 - NAB Data Shows Dining Spend Still Growing

• NAB Consumer Spend Trend data, reported on 24 June 2026, showed cafe, restaurant and pub spending up 7.6% nationally over the past year.
• Cafe and restaurant spending rose 2.9% in May 2026, well ahead of 1.1% growth in overall consumer spending.
• Western Australia led states at 8.5%, with New South Wales at 7.1% and Victoria at 5.9%.

May 2026 - Restaurant Industry Seeks Flat Dollar Wage Rise

• Restaurant & Catering Australia lodged a supplementary submission to the Fair Work Commission's 2026 Annual Wage Review on 20 May 2026.
• It asked for any increase to be a flat dollar amount, to stop penalty rates and loadings amplifying the headline rise.
• It cited profit margins as low as 2.3% and said 41% of businesses had already cut staff hours.

Key Insight

Cost pressure defines the trend, with higher award wages and thin margins pushing closures up even as household spending on cafes, restaurants and pubs keeps growing at a healthy pace.

Recent Market Developments in the Australia Foodservice Market

Recent developments, presented from the most recent, show listed operators resetting pricing and store networks while distributors and contract caterers reorganise around larger customers.

August 2026 - Domino's Reports Loss and Resets Pricing Model

• Domino's Pizza Enterprises reported on 26 August 2026 a statutory net loss of AUD 134.2 million after AUD 255.7 million of non-cash write-downs.
• Same store sales in Australia and New Zealand fell 4.7%, and the group plans up to 60 store closures across its regions.
• A Western Australian trial of a revised pricing and operating model is set to roll out nationally.

August 2026 - Guzman y Gomez Delivers Record Network Sales

• Guzman y Gomez reported on 21 August 2026 network sales of AUD 1,377.8 million, up 17.9%, and statutory net profit up 31.6%.
• It opened 35 restaurants in FY26, plans 35 more Australian openings in FY27 and has 117 Australian sites in its pipeline.
• It announced a further AUD 100 million share buyback after deploying AUD 100 million in FY26.

June 2026 - Collins Foods Posts Record Revenue and Exits Taco Bell

• Collins Foods reported a record AUD 1.59 billion of FY26 revenue on 30 June 2026, up 8.6%.
• KFC Australia same store sales rose 4.4% in the first eight weeks of FY27.
• Collins agreed to transfer 20 of its 27 Taco Bell restaurants to an affiliate of Yum! Brands and Restaurant Brands, closing the other seven.

January 2026 - Metcash Appoints Foodservice and Convenience Chief

• Metcash named Bruce Sabatta chief executive of its Foodservice and Convenience wholesale business, effective 2 March 2026.
• He replaced Superior Foods founder Craig Phillips, who moved into an advisory role.
• Metcash food sales rose 7.2% in the first half of FY2026, though underlying profit after tax fell 5.9%.

Key Insight

Listed operators are resetting pricing, expanding drive-thru networks and exiting weak brands, while wholesalers and contract caterers refresh leadership and secure larger long-term customers.

Australia Foodservice Industry Segmentation

The Expert Market Research’s report on the Australia Foodservice Market offers a detailed analysis of the market based on the following segments.

Market Breakup by Service Type

• Quick Service Restaurants
• Full-Service Restaurants
• Cafes and Coffee Shops
• Pubs, Clubs and Bars
• Others

Full-Service Restaurants lead because Australia's dense base of dine-in venues captures the largest share of occasion spending, though Restaurant & Catering Australia put margins as low as 2.3% in May 2026. Quick Service Restaurants grow fastest at an estimated 5.8% CAGR, as Guzman y Gomez opened 35 restaurants in FY26 and reported 17.9% network sales growth in August 2026. Cafes and Coffee Shops grow at 4.4%, helped by morning trade but hurt by closures. Pubs, Clubs and Bars grow at 3.9% on spending that NAB showed up 7.6% in June 2026. Others cover contract catering, camps, hospitals, schools and defence feeding, including Compass Group Australia's September 2025 defence contract.

Market Breakup by Service Channel

• Dine-In
• Takeaway and Drive-Thru
• Delivery and Click-and-Collect
• Others

Dine-In leads because restaurants, pubs and cafes still earn most revenue from seated customers, but it grows slowest at an estimated 3.8% CAGR. Delivery and Click-and-Collect grows fastest at 7.4%, as Domino's cut back deep discounting and reset its pricing model in August 2026 to protect franchisee profit. Takeaway and Drive-Thru grows at 5.0%, supported by McDonald's Australia's plan, reported in July 2025, to open 30 to 50 restaurants in 12 months. Others cover catered events, vending and on-site staff dining, which follow employment and campus occupancy.

Market Breakup by Ownership Model

• Franchised Chain Outlets
• Company-Owned Chain Outlets
• Independent Operators
• Others

Independent Operators lead in value because most cafes, restaurants and pubs are owner-run, yet they grow slowest at an estimated 3.9% CAGR, with 12.03% of cafes, restaurants and takeaways closing in the year to July 2026. Franchised Chain Outlets grow fastest at 5.6%, as Domino's reported in July 2026 that rolling average store EBITDA reached AUD 105,700 by the third quarter and Collins Foods lifted KFC Australia same store sales 4.4% in early FY27. Company-Owned Chain Outlets grow at 4.4%, led by contract caterers and corporate-run formats such as those Sodexo Australia mobilised for Santos in March 2025.

Market Breakup by Region

• New South Wales
• Victoria
• Queensland
• Western Australia
• Others

New South Wales dominates on Sydney's dining density, and grows at an estimated 4.5% CAGR, with café and restaurant spending up 7.1% in the NAB data reported in June 2026. Western Australia is the fastest-growing region at an estimated 5.4%, led by spending growth of 8.5% in that data and McDonald's Australia naming Perth a key area for new restaurants. Queensland grows at 4.8% on tourism and Collins Foods' KFC base, while Victoria grows at 4.3% after the weakest spending growth of the four, at 5.9%. Others, grouping South Australia, Tasmania, the ACT and the Northern Territory, grows at 4.6%, with the Northern Territory at 7.8% in the same data.

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If you choose to purchase the full report at a later stage, the amount already paid will be adjusted, and you will only need to pay the remaining balance.

Competitive Landscape in the Australia Foodservice Market

Competition combines global quick service brands, listed Australian franchisors, contract caterers and broadline distributors. Scale in purchasing, site selection, digital ordering and labour management separates operators that absorb cost increases from independents that close.

Collins Foods

Collins Foods, headquartered in Brisbane, is an ASX-listed franchisee operating more than 280 KFC restaurants across Australia and Europe. It reported record FY26 revenue of AUD 1.59 billion on 30 June 2026, with underlying net profit from continuing operations up 13% to AUD 61.4 million. KFC Australia same store sales rose 4.4% in the first eight weeks of FY27, and it agreed in March 2026 to transfer 20 Taco Bell restaurants.

Domino's Pizza Enterprises

Domino's Pizza Enterprises is the Australian master franchisee for Domino's, headquartered in Brisbane, with more than 3,600 stores across Australia, New Zealand, Japan, France, Germany and other markets. On 26 August 2026 it reported underlying net profit after tax up 4.0% to AUD 121.6 million but a statutory loss of AUD 134.2 million. New chief executive Andrew Gregory started on 5 August 2026 and Western Australian pricing trials are going national.

Guzman y Gomez

Guzman y Gomez, headquartered in Sydney, is an ASX-listed Mexican quick service chain with drive-thru and digital ordering at the core of its Australian growth. On 21 August 2026 it reported FY26 network sales of AUD 1,377.8 million, up 17.9%, and underlying net profit after tax up 29.7% to AUD 53.4 million. It had 284 restaurants globally at 30 June 2026 and a pipeline of 117 Australian sites.

Compass Group Australia

Compass Group Australia, based in McMahons Point, Sydney, is the local arm of the global contract caterer, serving workplaces, defence, health, education and remote sites. In September 2025 it announced a new six-year Living and Working Services contract with the Australian Defence Force across New South Wales, the ACT and Queensland. The scope covers accommodation, transport, fitness centres, cleaning, pest control and laundry, alongside its existing hospitality and catering work for Defence.

Other players operating in the Australia foodservice market include McDonald's Australia, Sodexo Australia, Metcash, Bidfood Australia, and Uber Eats, alongside independent restaurants, cafes, pubs and clubs, regional wholesalers, delivery platforms and catering firms supplying meals across Australia.

Key Insight

Competition turns on scale, site networks, digital ordering and purchasing power rather than price alone, favouring franchised chains and large caterers over independents as costs rise.