For many Australian companies, success at home inevitably raises the question: can it work overseas?
After six years chasing the American dream, Guzman y Gomez announced its exit from the US market last month, drawing a line under an ambitious but ultimately unsuccessful push into the world’s largest and most competitive restaurant industry.
Guzman y Gomez founder and co-chief executive Steven Marks has pulled the pin on the chain’s US restaurants after conceding the American expansion would take more time and capital than expected.
The Mexican-inspired fast-food chain entered the US in 2020 with a store in Naperville, Illinois. Seven more outlets followed, but the brand failed to gain traction beyond the Chicago area, stalling its hopes of becoming a truly global player.
Industry analysts had long questioned whether GyG could carve out a niche in a market already dominated by established Mexican-inspired giants such as Chipotle, while also competing against a vast network of independent Latin American restaurants.
For that reason, some have described the US as a “graveyard” for Australian food brands. IBISWorld industry analyst Joshua Campbell said GYG’s withdrawal came as little surprise.
“The company’s 2025 US accounts reported an operating loss of around $13 million, with management warning losses were likely to widen if it continued investing in Chicago,” Mr Campbell told realcommercial.com.au.
“At the time, the business was not forecast to break even in the US until 2037.”
Retail expert Professor Gary Mortimer says taking successful Aussie chains overseas is always a tall order.
Retail expert Gary Mortimer agreed, saying success in America was always going to be a tall order for the Australian chain.
“International expansion is one of the riskiest growth strategies a business can pursue. A brand may be well known and highly successful in Australia, but that doesn’t necessarily translate overseas, where consumer tastes and expectations can be very different,” he said.
“GYG’s move was always going to be difficult because the US already has a strong and highly competitive Mexican food market. They have experienced leadership and would have undertaken extensive research before entering the market, but ultimately the opportunity they saw didn’t materialise in the way they expected.”
The lure of the US market
The Guzman y Gomez experience is far from unique, with several Australian fast-food chains having previously tried, and failed, to crack the American market.
Crust Pizza entered the US in 2015, opening stores in Los Angeles with ambitions of a broader rollout. While the concept generated early interest, the brand struggled to gain scale and quietly withdrew a few years later.
Crust Pizza had a short stint in the US in the 2010s. Picture: News Corp / Andy Brownbill
Oporto’s foray was even shorter-lived. The flame-grilled chicken chain opened three Southern California restaurants in 2011, but all had closed by 2013.
Then there was Sydney-born brand Pie Face, which attempted to introduce an Aussie classic to American consumers. Arriving in New York in 2012 amid considerable fanfare, the company unveiled plans to open dozens of stores across the country.
At its peak, Pie Face operated seven Manhattan locations and attracted a $15 million investment from casino mogul Steve Wynn. But rapid expansion, mounting losses and franchise challenges ultimately derailed the venture, with the company shuttering its US operations by late 2014.
Oporto is a genuine Aussie success story but failed to gain traction in the US. Picture: realcommercial.com.au
IBISWorld’s Joshua Campbell said Australian brands are often seduced by the size of the US market while underestimating the challenges.
“Even though they face a low probability of success, the potential value can look really attractive on paper. The US offers huge potential, but it’s also highly saturated and burdened by high labour and property costs. By comparison, many Asian and Middle Eastern markets offer stronger growth, less competition and more attractive franchising opportunities,” he said.
But if the US has been a graveyard for some Australian brands, Australia has proved just as challenging for a number of American chains seeking a foothold down under. Wendy’s returned to Australia last year after its first attempt in 1982, Taco Bell is now on its third crack at the market, while Carl’s Jr entered voluntary administration in 2024.
“It’s certainly not a one-way street,” retail expert Gary Mortimer said.
“These brands encountered many of the same challenges Australian chains face in America – established competitors, loyal customers with entrenched tastes, and markets that are far harder to disrupt than they first appear.”
Pie Face was one of the more memorable flops in the US. Picture: News Corp
Bunnings misreads British shoppers
But the challenges of international expansion are not limited to food chains.
In one of Australia’s most high-profile retail missteps, Bunnings acquired British home improvement retailer Homebase in 2016 for £340 million, hoping to replicate its hugely successful warehouse model in the UK. However, British shoppers failed to embrace the format, with product ranges, store layouts and pricing strategies all coming under scrutiny.
Bunnings almost has a monopoly in Australia but failed to capture the UK market. Picture: NewsWire / Andrew Henshaw
“The problem was that UK consumers are generally more renovation-averse and more reliant on a ‘do it for me’ model than the DIY culture that’s prevalent in Australia,” IBISWorld analyst Joshua Campbell said.
The strategy unravelled quickly. Just two years after the acquisition, Bunnings sold Homebase for a nominal £1, having lost more than A$1 billion on the venture.
“Bunnings management has since acknowledged that they underestimated both cultural differences and the strength of local incumbents like B&Q, which retained customer loyalty.”
Experts say Bunnings’ plans with Homebase failed to takeoff due to the UK not having as much of a DIY culture like Australia. Picture: John Keeble/Getty Images
Can Chemist Warehouse take on the UK?
Whether the Bunnings experience will serve as a cautionary tale for retail giant Chemist Warehouse’s UK ambitions remains to be seen. For now, the Australian pharmacy chain is taking a relatively measured approach, with five stores set to open in north-east London from November.
The rollout almost became far more ambitious. Earlier this year, Sigma Healthcare, the owner of Chemist Warehouse, was linked to a $14 billion takeover bid for British pharmacy giant Boots. Had the deal proceeded, it would have instantly given Chemist Warehouse a nationwide footprint of more than 1,800 stores across the UK.
Chemist Warehouse and Sigma Healthcare merged to create Australia’s largest pharmacy network, shaking up the sector. Picture: Shae Beplate
Instead, Sigma this week walked away from the talks, saying the Australian market remained its primary focus for growth.
Mr Campbell said the proposal highlighted a common pitfall for Australian companies expanding overseas.
“There is often a tendency for businesses to overestimate how well their brand will travel. Strong performance at home can create a false sense of confidence, but overseas markets come with different consumer behaviours and cultural expectations,” he said.
“Established local brands benefit from familiarity, extensive store networks and years of customer trust. Those advantages can make them far stronger competitors than they initially appear to a foreign entrant.”
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