Australia's foodservice delivered another resilient quarter. Despite intensifying economic pressures, foodservice traffic grew for the fourth consecutive quarter.
Overall in Q1 2026, total spend increased 5.9 percent, supported by a 0.6 percent lift in traffic, reinforcing that higher average eater cheques continue to drive growth. However, this resilience may reflect a timing lag, as consumers have not yet fully absorbed the impact of rising interest rates, elevated fuel prices, and escalating global tensions.
QSR continued to lead market growth within the sector, and remained the primary growth engine with traffic up 1.0 percent. Full-service restaurants’ growth was solely due to higher cheques, whilst retail posted steady performance.
The economic pressures have reshaped group and daypart dynamics.
Adult-only groups grew in spending and customer traffic, which was a sharp contrast to the family demographic, which declined. Lunch and morning dining were the only dayparts to grow traffic, which reinforced a consumer preference to earlier-day than later occasions when it came to dining.
Value channels have outperformed amid the current economic volatility. Core QSR categories, such as burgers, cafe, chicken and ethnic, delivered the strongest traffic growth among customers, alongside solid gains in supermarket foodservice.
The cash rate rose for the second time this year, whilst fuel prices remained elevated amidst the conflict in the Middle East. Q1 performance suggests foodservice’s resilience may be due to a timing lag rather than insulation. As macroeconomic volatility persists, foodservice engagement is expected to be shaped by consumers who are cautious but not fully disengaged.
This data followed previously published research from Circana, which found that foodservice spend was forecasted to grow three percent across the United States and Europe too.
What until recently could be described as a silent revolution is now becoming increasingly loud and visible across Europe. There is a beverage transformation taking place that will represent one of the defining growth trends of the coming months, and is one area where the U.S. market behaviour acts as an effective consumer radar, helping to anticipate the scale and direction of change in Europe.
In Europe, 14 percent of visits are beverage-only compared with the surge of growth (45 percent) being experienced in the U.S., though this measure is rising steadily as operators invest in premium coffee, functional drinks, and low/no-alcohol options.
“Looking ahead, the next major wave of this Liquid Revolution will be the arrival of modern sodas in Europe. These are refreshing beverages with functional benefits, such as magnesium or zinc content, or claims linked to energy, focus and wellbeing, that align closely with evolving health and lifestyle motivations,” said Edurne Uranga, VP of Foofservice Europe at Circana.
“This will not only translate into new menu development within existing foodservice concepts, but, as already seen in the US, is likely to trigger the emergence of entirely new foodservice chains built exclusively around these drink‑led propositions, similar to concepts such as Swig, Fiiz, Fixxology or Twisted Sugar.”
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