Trade Tensions Shake Up Fast Food and Retail

Donald Trump’s new tariff plans are setting off tremors across Australia’s retail and fast food sectors, as companies scramble to assess the impact on costs and consumer demand. While the move aims to support American manufacturing, Australian brands tied to exports or reliant on imports face pressure, especially the country’s largest KFC operator, which may lose ground to beef-based rivals if domestic meat prices tumble.

At the centre of the shake-up is a fresh 10% tariff on Australian beef heading to the United States. This could divert more meat back into the local market, potentially driving down domestic prices. For burger chains like McDonald’s or Hungry Jack’s, that’s a potential windfall, as cheaper beef means they can offer better deals. But for chicken-specialty brands like those under Collins Foods, the shift creates a pricing disadvantage, especially in a market already sensitive to cost-of-living pressures.

Australian fast food chains that rely mainly on local chicken are seeing minimal benefit from any beef price falls. With no export channel to spread costs, they could be left absorbing inflation in feed or processing. Meanwhile, a family bucket of fried chicken already sits at nearly $40, making it harder to compete if burger outlets start cutting prices aggressively.

The market responded swiftly. Shares in KFC’s parent company dropped amid fears of lost pricing power. Retail investors also watched companies like Breville and ARB Industries slide, due to their reliance on overseas manufacturing and American revenue. Breville, which makes most of its products in China, warned of higher costs in 2026 due to anticipated tariffs. ARB, which is heavily exposed to US car accessory demand, could suffer if American consumers switch to domestic vehicles or pull back on discretionary auto spending.

However, not all sectors felt the sting. Wine producer Treasury Wine Estates seemed well insulated, with most of its US-facing revenue generated from American vineyards it already owns. Additionally, defensive domestic-focused brands like Woolworths and Coles bucked the trend, rising as investors chased stability in uncertain times.

These moves paint a broader picture of how trade policy shifts can ripple down to impact everything from what Australians pay for lunch to how companies position themselves globally. While some industries may adjust quickly, others tied to exports or global supply chains may face rougher terrain ahead.

Source: The Australian, News