KFC Experiencing Gradual Slump in China Market

Published By : 01 Jun 2015 | Published By : QYRESEARCH

The lack of innovation along with other issues has been the main reason why the fast food chain KFC is experiencing a gradual slump in China, according to the Shanghai’s CBNWeekly.

The United States giant in food and beverages Yum! Brands that own the KFC brand witnessed a 4 per cent slump in the global Q1 revenue and a 9 per cent profit. According to hedge fund firm’s founder, the Yum! Brand must adjust their business in China in order to survive. The food firms’ same store sales in the nation China slumped by 16 per cent and 14 per cent during the Q3 and Q4 respectively in the year 2014.

Furthermore, the issues faced by the food firm in the nation China can be due to KFC, which accounts for around four thousand stores out of six thousand stores of Yum! Brand. The food brand also houses Taco Bell and Pizza Hut as subsidiaries.

The worldwide store numbers of KFC have been dwindling for the nine consecutive years. However, the brand continues to open new branches in China, where it was able to beat McDonald’s as the nation’s first western fast food pioneer. In 2015’s first two months, 171 stores were opened. Nevertheless, the franchise is now observing falling incomes along with profits.

According to the report, this is mainly due to the lack of innovation on KFC’s part as the market is now marked with intense competition between several countless foreign and local brands.

Previous success of KFC can be partly attributed to the compliance from authorities which allowed them to dominate the less competitive environment of the past. However, at present the brand is lagging behind other emerging local fast food chains.
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