Yum! Brands Inc., Reports Higher China Profits Amid Revival in Chinese Consumer Buying

Published By : 23 Apr 2014 | Published By : QYRESEARCH

If the revived profit margins of Yum! Brands Inc. in China are any indication it seems that consumers in China are showing an interest in KFC fried chicken again. The brand also runs the Taco Bell chain of restaurants in the country. According to the company, its first-quarter profits in China saw an 18% rebound. Stores that have been operational for at least 12 months also saw a 9% after showing a decline for five consecutive quarters.

 

Much of the bad business was brought in by the avian flu scare in China. An investigation that was ordered into the company’s supply chain in 2013 has also begun to fade from public memory.

 

The company is dependent on China to a great degree given that nearly 50% of its business comes from the second largest economy in the world. There have been numerous reassurances from Yum! Brands Inc that their food is safe for consumption. The company tried to reiterate this sentiment with a massive ad campaign about the KFC quality assurance. In a bid to entice more consumers in China, the company is currently said to be working on new food items and marketing strategies.

 

In China, KFC’s menu features as many as 15 new items, and it seems to be resonating with diners ultimately leading to higher sales, according to a statement by the company’s CEO David Novak. This has given the company both confidence and funds to move a step closer towards launching 700 new restaurants in Asia in 2014.

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