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KFC may increase menu prices, again

·2-min read
KFC store
KFC customers may see higher prices at the fast food chain. (Source: Getty)

The head of a major franchise operator of KFC in Australia has alluded to a possible further price increases as Australians continue to battle cost-of-living pressures.

Collins Foods, a publicly listed franchise operator of KFC and Taco Bell restaurants in Australia, has upped menu prices to offset inflationary pressures twice already this year.

If prices do increase, which has not yet been confirmed, they will be increased by around 1-2 per cent.

In Australia, the company has been facing chicken supply disruptions, as well as a lettuce shortage - triggered by the floods - that forced the company to swap to shredded cabbage.

According to the company's FY22 results, KFC was well-placed to manage inflationary pressures, although it “anticipated” menu price increases “above historic norms”.

The company expected to be insulated from further disruptions to chicken supplies due to contracts locked in until the end of 2022 for poultry.

The company also sources 95 per cent of its ingredients locally, which helps miminise the impact of high costs of import and freight.

“While menu pricing is factoring into our efforts to offset margin pressures, we will continue to keep value at the centre of our customer appeal,” Collins Food CEO Drew O’Malley said.

“While some margin compression in the short-term is unavoidable, in the mid-term we expect margins to recover, and remain on track to deliver on our growth ambitions.”

Fruit and vegetable prices through the roof

Shoppers have been met with empty shelves and sky-high prices at the supermarket due to bad weather devastating crop yields.

According to Woolworths’ latest Fresh Market Update, shoppers will be waiting until as late as mid-August before they see lower prices for some fresh produce.

Supplies of lettuce are expected to improve by around mid-July, along with zucchinis, Asian leafy greens, baby spinach and grapes.

Fresh herbs have also been hit by poor weather conditions, with supplies expected to improve in early August.

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