KFC has announced plans to create 7,000 new jobs across the UK and Ireland as rival fast food chicken chains such as Wingstop threaten to take a bigger bite of the market.

The fried chicken firm is investing nearly £1.5bn over five years, part of which will be spent on new restaurants in “key locations” such as Ireland and north west England, where it opened its first-ever British restaurant 60 years ago in Preston.

Consumers in the UK and Ireland spend billions of pounds in fried chicken chains every year.

KFC revealed its plan as competitors expand in Britain and Ireland, including Popeyes, famed for catering singer Beyoncé and rapper Jay-Z’s wedding in 2009.

It said it will plough nearly £500m into 500 new sites as well as upgrading existing shops. It currently has more than 1,000 restaurants across the UK and Ireland, the majority of which are operated by franchisees.

The fast-food chain said the 7,000 new jobs it expects to create in the UK and Ireland will include servers, kitchen-based roles and managers.

It will invest in its supply chain to “strengthen long-standing relationships” such as with Pilgrim’s Europe, which is based in Warwick, and McCormick in Buckinghamshire which makes the fast-food firm’s gravy, the company added.

KFC is by far the largest fried chicken chain in Britain. But in recent years, smaller competitors have been growing including America’s Wingstop which, in December last year, sold its UK arm to US private equity firm Sixth Street for £400m.

Wingstop currently has around 57 franchised sites in the UK and plans to open another 20.

Meanwhile, Popeyes UK has 65 restaurants across the UK and Ireland after a big expansion last year when it opened 33 shops.

According to market research firm Kantar, Britons spent about £2.8bn on fried chicken from fast food shops in the year to 20 April.

Dave’s Hot Chicken – the US brand which counts rapper Drake and actor Samuel L Jackson among its backers – opened its first restaurant in Britain last year, located in London, and plans to launch a further 60 shops in the UK and Ireland.

Commenting on plans to recruit thousands of workers over the next five years, Rob Swain, general manager of KFC UK & Ireland, said he did not anticipate any difficulty in finding staff.

Fast food restaurants are popular places for younger people to get entry level jobs.

However, the number of 16 to 24 year-olds not in education, employment or training – commonly referred to as NEETs – totalled 923,000 between January and March, according to data from the Office for National Statistics.

While the number is dropping, the percentage of NEETs in this age range remains comparatively high.

But Mr Swain said KFC receives around half a million job applications every year, and promotes some 2,000 staff internally into management roles annually.

He admitted that a recent rise in UK employment costs had been “challenging”.

In April, these grew after the National Minimum Wage for workers aged between 16 and 20 years-old and the National Living Wage paid to over-21 all increased.

At the same time, the level of National Insurance Contributions paid by employers also rose.

Mr Swain said KFC had “talked about this a lot internally”. He said that the company’s labour costs have been rising every year for a long period of time “whether that’s National Insurance, whether that’s National Minimum Wage”.

But he said: “What I would say is this increase was bigger than we were expecting.”