High rents, labour costs loom over Jollibee’s Australia plans
A crowded chicken segment could also weigh on initial growth.
Jollibee Foods Corp.’s long-rumoured move into Australia is edging closer, but analysts said the Filipino fast-food group faces a difficult early phase in one of the world’s most competitive quick-service markets.
Jollibee, which has relied on the Filipino diaspora as part of its global expansion strategy, will be tested in Australia where the market is mature, labour is expensive, and competition for prime sites—especially drive-thrus—is intense.
There is a real opportunity, but it’s not going to be easy, Anuran Dhar, practice head for foodservice at GlobalData Plc, told QSR Media.
“Our own analysis points to increasing interest in Filipino and Southeast Asian fare amongst diverse communities,” he said in an emailed reply to questions. “At the same time, value-focused eating is clearly on the rise.”
About 35% of Australians are quick to try flavours when they enter the market, whilst 28% visit quick-service restaurants (QSR) at least once a week, reflecting growing price sensitivity, according to GlobalData. That supports Jollibee’s value-led positioning, Dhar said, but cost pressures could complicate execution.
Speculation around Jollibee’s arrival intensified after realcommecial.com.au reported that the company is working with developer PMG Group to secure a former Sizzler site in Campbelltown, in Sydney’s southwest. Neither party has confirmed the deal, and a Jollibee representative has declined to comment on the report.
The report has sharpened focus on how the chain might fare in Australia, where high costs, tight real estate and a crowded chicken segment could weigh on its initial growth.
Jollibee, the Philippines’ biggest fast-food chain, operates more than 10,000 restaurants across 19 brands in 33 countries.
Australia’s average base pay rose 3.4% in the year to September, according to official data, with accommodation and food services recording the biggest quarterly increase.
Import prices climbed 2.3% over the same period. Dhar said rent, labour and supply chain costs would be key risks, especially if specialty ingredients need to be imported.
He said securing ingredients locally might be costly or logistically complex, and staff shortages could affect consistency during peak periods.
“To succeed, Jollibee will need an entry strategy that blends innovation and heritage with disciplined cost control, partners for local sourcing, menu pricing that meets what value‐minded Australians expect, and a firm commitment to preserving what makes the brand unique,” Dhar said.
Crowded chicken space
Competition adds another layer of pressure. Australia’s chicken category is crowded, spanning global chains, national players and smaller independent operators.
Jeff Vassel, global business development manager at Geotech Information Services Pty Ltd., said prime sites are becoming harder to secure, particularly for drive-thrus, which many brands see as essential for volume and margins.
“In addition, Jollibee’s menu offering skews heavily towards chicken, and Australia already has a number of other QSR’s operating in the chicken space, in addition to many smaller and emerging family-run businesses,” he said in an email.
Recently, local chains have increasingly turned to drive-thru formats as a growth lever. Soul Origin (Australia) Pty. Ltd. has opened its first drive-thru, aiming for a step change in turnover, while El Jannah is pursuing aggressive expansion towards 100 outlets following its private equity-backed investment.
Still, analysts said Jollibee has one clear advantage: flexibility. The group operates across drive-thru, high-street and food-court formats, giving it more options when negotiating leases.
That adaptability could help it secure sites others might overlook, especially in suburban locations.
Vassel said Sydney and Melbourne are likely starting points, given their large Filipino populations and broad acceptance of Asian cuisine.
Those cities offer a ready base of brand-aware customers, but reliance on diaspora demand could also limit expansion if the concept fails to connect with a wider audience.
Dhar said Australian consumers expect more than flavour. Convenience, sourcing practices and sustainability influence purchasing decisions, whilst premium pricing needs a clear justification.
Both analysts urged a measured rollout. Opening a small number of flagship stores in high-traffic locations could help Jollibee refine operations, test pricing and adapt its offer before expanding further.
Vassel said Western Sydney, with its dense population and diverse demographics, could be a practical launch pad for Jollibee.
Dhar said brands that combine cultural identity with local relevance tend to perform better over time. Jollibee should focus on a few tier 1 locations such as Sydney and Melbourne, refine its operations, and then scale.
