The chips are down: pizza, fried chicken and doughnut shares plunge on ASX as living costs bite budgets

Shares in KFC operator Collins Foods have fallen on the ASX as consumers look to reduce spending amid cost of living pressures. Photograph: Keith Morris/Alamy View image in fullscreen Shares in KFC operator Collins Foods have fallen on the ASX as consumers look to reduce spending amid cost of living pressures. Photograph: Keith Morris/Alamy The chips are down: pizza, fried chicken and doughnut shares plunge on ASX as living costs bite budgets Shares in Domino’s Pizza, KFC operator Collins Foods and multi-brand food franchise owner Retail Food Group have all suffered double-digit falls Get our breaking news email, free app or daily news podcast Once a symbol of cheap eating, fast food is transforming into a luxury many can no longer afford due to resurgent living costs. This shift is reflected on the ASX, where major pizza, fried chicken and doughnut outlets are seeing significant price drops, raising the question: are consumers so downbeat that they are even giving up on fast food? Shares in Domino’s Pizza, KFC operator Collins Foods and multi-brand food franchise owner Retail Food Group have all suffered double-digit falls over the past two months, coinciding with surging oil prices tied to the US-Israel war on Iran. The Guzman y Gomez share price is also down, even as the broader ASX has proven robust. Lochlan Halloway, an equity market strategist at Morningstar, says the stocks are under pressure because concerns over consumer spending are coinciding with fast-rising operational costs. “Fast food is a discretionary purchase, something that’s probably fairly easy to cut if your budget’s pinched, and so they might be a casualty of consumers just trading out of the category entirely,” Halloway says. “You’ve also got costs increasing materially due to high fuel prices, interest rate concerns and other forms of cost pressures. You’ve got a squeeze from both ends.” Consumer confidence has plunged in Australia, as anxiety over job prospects and employment security reaches levels not seen since the early pandemic, according to the closely watched Westpac-Melbourne Institute consumer sentiment index, released earlier in April. Consumer prices are growing at their fastest pace in two and a half years, with inflation jumping to 4.6% in the year to March as the fallout from the fuel shock starts to ripple through the economy. For many Australians, the sight of high prices on roadside fuel boards in March was enough to trigger an immediate response, with cafes reporting a fall in the sale of takeaway coffees, restaurants recording a pullback in spending, and sales of furniture, bedding and homewares sliding. The elevated fuel prices have coincided with interest rate rises, leaving many households paying more on their mortgages while grappling with rising fuel costs and living expenses. While many of the fast food stocks haven’t released updated revenue forecasts, the general pessimism has infected investors who assume customers are spending less on takeaway. There is a question over whether traditional fast food chains, including McDonald’s, are now seen as too expensive for what they offer in an increasingly competitive Australian market. The fast food market is highly sensitive to price changes, given customers constantly weigh the cost and convenience of buying takeaway. “As far as the stock price reactions go, the market does have a tendency to overreact during these periods,” says Halloway. “But some selling is expected and probably justified, because this is a risk for the earnings outlook for these businesses.” Shares in ASX-listed Domino’s fell more than 10% in a single trading session on Tuesday after its US listed namesake released underwhelming financials. Shares in Retail Food Group, which houses Gloria Jean’s, Donut King and Crust Gourmet Pizza, among other brands, have fallen more than 40% in 2026, while the stock price of KFC operator Collins Foods is down 25% over the past six months. While specific business issues have contributed to some of those falls, all have suffered from deteriorating consumer sentiment. The sharp share price falls are somewhat counterintuitive given fast food stocks are traditionally resilient during economic downturns because they capture customers trading down from restaurants. Sophia Mulligan, investment analyst at Wilson Asset Management, says there are fears the “trade-down defensiveness” that had helped the sector in the past won’t hold this time. She says high petrol prices are also hurting traffic numbers, with a knock-on effect on drive-through sales. Explore more on these topics Australian economy Business Consumer affairs Fast food Cost of living crisis Stock markets news Share Reuse this content