Chain Reaction

When Starbucks opened in Sydney's CBD in 2000, it did so with huge bluster and high hopes. Over the following eight years, expansion was aggressive, with over 80 stores opened in Australia. But Australian consumers were unimpressed. Within a decade the chain lost millions and shuttered two-thirds of its Australian stores. Two decades later, there are signs that Starbucks may be gaining ground, but the brand still suffers the indignity of being a case study on how not to stuff up an expansion. 

In 2025, there was a net increase of 250 quick service restaurants in the country, the highest increase per year in almost 10 years. (Quick service restaurants, or QSRs, is an industry term that basically describes fast food, without the junk connotation.) Even Melbourne, home of laneway restaurants and eateries tucked behind unmarked doors now has 1,522 QSRs, edging out Sydney’s 1,507 for the first time. 

So is this a temporary bubble or is it the new makeup of our cities’ food scenes? It helps to first acknowledge that chain eateries have evolved. Professor Anish Nagpal, an associate professor in the Faculty of Business and Economics at the University of Melbourne says “20-30 years ago, fast food was mostly burgers and chips, but now there’s more range with brands like Grill’d, Guzman Y Gomez and Zambrero.” This is the era of chain restaurants that reflect Australia’s globalised taste buds and multiculturalism, be it American chains (Five guys, Wingstop), Asian brands (Marrybrown, Mollytea) or local eateries that have become popular chains (El Jannah, Gami).

Fast food and chain restaurants have always been the domain of the young. The food is priced for mass affordability – you can get snack size meals for under $10 at Grill’d and Korean rice bowls for about $15 from Gami – but the cost of living crisis seems to have turbo-charged this. With set meal options, regular promotions and loyalty programs, the economics tip in their scale.

In comparison, sitting down for a two-hour meal in an independent restaurant and ordering appetisers, drinks, a main meal and dessert has become an indulgence that not many can afford, even for special occasions. Mark Field, founder and CEO of Prof Consulting Group, a FMCG consulting company says “If you go to a restaurant, you may not know what it costs at the end. And now, there’s an expectation of tipping. But with chain restaurants, there is more clarity in the cost per meal and this is especially important if you’re dining out as a family.” 

In addition, Gen Zs who came of age during the lockdown years have very little memory or experience of  interacting with a barista who knows their coffee order. Instead, they have become accustomed to contactless delivery thanks to delivery apps, QR codes in restaurants and self checkout machines in supermarkets. 

While there is a lot of interest and speculation on whether the new wave of American food chains in Australia can gain traction and market share, they certainly seem to have settled in, buoyed by the growing diaspora as well as a wider familiarity of Asian food and culture. Just observe the long queues outside premium Chinese tea brand Mollytea. Gong Cha and Sharetea – a local brand – have over 300 kiosks between them. 

Asian chains that have expanded to Australia are often brands with long histories in their home countries, and inspire deep nostalgia for the community. Examples include Malaysia’s Marrybrown, which serves halal fried chicken, and Indonesia’s Sederhana, famed for its Minangkabau cuisine. When the first Australian Sederhana outlet opened in Melbourne this year, the diaspora came out in droves. 

In fact, Annastasia Jessica, Marketing & PR Coordinator for the Australian outpost, says she barely had to do any promotion for the store’s opening. “When we first opened, we ran out of food by 6 p.m. because of the high demand.” 

Even the newer Asian chains have found a welcoming audience amongst those who are looking for a taste of home. And some of these customers may also have the perception that large, chain restaurants are more likely to have better food safety standards than small independent restaurants because the former is subject to more scrutiny. 

Danya Hu, a student who has lived in Australia for the last seven years is emblematic of this. “Growing up in Chong Qing [China], food safety and hygiene is a big concern when eating out,” she says. Mince meat, which features in many local dishes, is a particular concern for her because she has no idea what kind of meat or cut of meat they serve. Having lived in Australia for a while, she trusts the food hygiene and quality here but still gravitates to noodle chains like 1919 Lanzhou beef noodles because it is a type of hard-to-find regional noodles. Plus at about $20 for a bowl of beef noodle soup, it is also good value-for-money. 

These types of gambles go both ways. In 2020, Australian chain Guzman Y Gomez attempted to break into the crowded U.S. Mexican fast food market, competing with chains like Taco Bell and Chipotle, but also a massive and beloved culture of street tacos and burritos. American consumers were not impressed. When the company’s founder and co-CEO shared the news in May 2026 that they were withdrawing from the U.S. market, its share price rose by 15%. We can claim all the coffee snobbery in the world, but we probably ought also to have some burrito humility.