Retail Food Group Navigates Turbulent Waters as Earnings Tumble
Australia’s well-known hospitality giant, Retail Food Group (RFG), is grappling with a significant downturn, reporting a substantial drop in earnings for the first half of the 2026 financial year. The Gold Coast-based company, which boasts a portfolio of beloved Australian brands including Donut King, Gloria Jean’s, Brumby’s Bakery, Crust Pizza, and Beefy’s Pies, has seen its underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) plummet by over 40 per cent.
During the initial six months of 2026, RFG recorded domestic sales of $254.6 million, a slight decrease of 1 per cent compared to the previous period. The more concerning figure is the underlying EBITDA, which landed at $9.2 million, marking a significant 43.1 per cent decline. This reflects a challenging start to the year for the nation’s largest multi-brand food franchisor, with core brand sales experiencing a 5.5 per cent dip in the first seven weeks of the calendar year. The company attributed this slowdown to customer count challenges, exacerbated by store closures.
Despite the current headwinds, RFG’s executive chairman, Peter George, has acknowledged the “challenging” trading conditions but highlighted the company’s commitment to a comprehensive transformation program and significant cost base savings. “Overall, these changes are intended to generate value for our franchise partners, and in turn, RFG’s shareholders, and we look forward to keeping the market informed of our progress,” George stated. The group is maintaining its underlying EBITDA guidance for the full 2026 financial year, projecting between $20 million and $24 million, with expectations of an improved performance in the latter half of the year.
Expanding Horizons and Strategic Acquisitions
RFG is also looking to diversify its offerings and strengthen its market presence through strategic initiatives. The company is set to launch the inaugural Firehouse Subs restaurant in Australia during the fourth quarter of 2026, having secured the exclusive license to develop the US-based brand nationwide.
Furthermore, RFG has bolstered its iconic pie offerings with the acquisition of Beefy’s Pies in November 2023 for $10 million. This has been followed by the opening of three new Beefy’s Pies stores year-to-date, with a continued focus on enhancing the brand’s operational efficiency and marketing efforts.
However, the overall store footprint for the group has seen a reduction. As of June 2025, the total number of stores under RFG’s umbrella was down by 29. While 22 new outlets were established, this was largely offset by the closure of underperforming stores and strategic site exits.
Brumby’s Bakery Sale Abandoned, Michel’s Patisseries Converted
In a significant development, RFG recently confirmed it had withdrawn its Brumby’s bakeries chain from the market after failing to secure a suitable buyer. Peter George explained that while the brand had attracted considerable interest from various parties, the available options were not deemed to be in the best long-term interests of shareholders, franchisees, or team members. “Brumby’s remains profitable and is an important contributor to the Group’s performance,” George added, underscoring the brand’s ongoing value to the company.
This decision follows the earlier closure of the once-popular Michel’s Patisseries brand in February of the previous year. All existing Michel’s Patisseries stores were subsequently converted into either Donut King or Gloria Jean’s outlets, a strategic move to consolidate and optimise the group’s brand portfolio.
As of the market close on Thursday, Retail Food Group shares were trading at $1.08, a notable decrease from their January peak of $1.54. The company’s performance underscores the dynamic and often challenging nature of the Australian food retail landscape, with RFG now focused on navigating these complexities through its transformation initiatives and strategic growth plans.
