WEATHER ALERT: School closures and delays

KFC just can’t give up on China

This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated.

HONG KONG — It’s the wild, wild east out there in China. But brands like KFC and Pizza Hut just can’t give up — no matter how many challenges they face.

Parent company Yum! Brands has been hit in recent years by major food safety scandals that damaged its brands’ reputations, including one this July that involved a tainted meat supplier.

Yum even said on Wednesday its China same-store sales this year will be in the red, as its brands were “significantly impacted by adverse publicity.” Shares of the stock plummeted in after-market trading in New York.

But despite scandals and poor sales, the company has shown no signs of slowing down its China investments, and continues to open new stores. Yum already has 6,400 restaurants in almost 1,000 Chinese cities, and plans to open another 700 new stores next year.

China is “the best restaurant opportunity of the 21st century with a consuming class that is expected to double from 300 million to more than 600 million people by 2020,” according to the company website. “We continue to invest behind the development of our emerging brands in China.”

It’s no surprise Yum sees China as an important market — the company generates more than 40% of its overall operating profits and more than half of its total sales from its KFC and Pizza Hut restaurants in China.

The company even acquired a local chain — hot pot cuisine — called Little Sheep in 2012. And its restaurants also make efforts to appeal to local tastes by putting traditional Chinese dishes on the menu.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Notice: you are using an outdated browser. Microsoft does not recommend using IE as your default browser. Some features on this website, like video and images, might not work properly. For the best experience, please upgrade your browser.