Max Brenner sign of broader trend, analysts warn
IBISWorld senior industry analyst Bao Vuong noted that the collapse of Max Brenner is likely just the beginning of a broader trend, as the range of food options continues to grow and the market becomes over-saturated.
“Competitive pressures and rising costs will likely force a number of smaller players and some larger operators to exit the industry,” Vuong said.
“However, this will be offset by an influx of new players in niche markets and cuisines that are not as yet saturated such as Middle Eastern cuisine and Mexican food.”
Vuong pointed out that the fast food, takeaway and restaurant industries are only expected to grow slightly over the next five years years due to this rising competition, placing more businesses at risk of meeting the same fate.
This issue extends beyond just the fast food and restaurant business, however, with Vuong adding that department stores, clothing retailers and toy and game retailers are likely to face similar pressures in the coming years – with Harris Scarfe, Espirit and Toys R Us being notable examples.
Moving forward, Max Brenner is looking to liquidate its assets after a deal to sell the business to investment company Tozer & Co fell through late last week according to BDO Australia, which confirmed it had explored a transaction with the firm, but that it had ultimately fallen through.
“We had a plan and a vision to restore the chain to profitability and to save the jobs of staff, but the commercial roadblocks and impediments were insurmountable,” Tozer & Co managing director David Tozer said.
“We thought we were very close to an agreement with the liquidators on Thursday morning but the requirements changed as the day progressed such that we were unfortunately left with no alternative but to move on.”
Tozer pointed out that at a time when the Australian retail industry is under enormous pressure to retain its commercial viability, it is “extremely disappointing” that a deal couldn’t be reached, and that he hoped another deal will be found elsewhere.
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