Kentucky Fried Chicken owner, Yum Brands, is reaching to China in a large-scale expansion to increase overall sales in the face of falling domestic revenue.
It is reported that KFC was the first American fast food chain to enter the Chinese market in 1987. The famous chain now plans to an additional 425 restaurants in the country in 2008, and hopes to eventually have more than 20,000 units open in the country, according to David Novak, chief executive of Yum Brands.
In 2007, KFC’s operating profit in its China division rose 30% to $375 mln accounting for more than a quarter of Yum Brands’ total operating profit. In the first quarter of 2008, the company’s sales in China grew 12%. This compares with a 5% increase from international locations and 3% from locations within the US.
Altered KFC menu
“We felt that we could not just copy a model in a foreign country,” said Sam Su, head of Yum Brands’ China division. “In a market like China, everyone should try to create new models.”
It is for this reason that chicken won’t be the only thing on the menu in Chinese KFC’s. Several of the units will serve fried dough, egg porridge and fish alongside as well.