KFC, Pizza Hut’s China owner plans stores in country’s ‘untapped’ smaller cities as consumers tighten belts amid slowing economy
- Yum China plans to open more stores in ‘untapped’ parts of the country where it hopes its low-price strategy will appeal to less affluent customers
- The fast-food giant has been keeping prices low to draw increasingly cost-conscious consumers to boost traffic and revenue amid a slowing economy
The fast-food behemoth said 30 per cent of its 1,500 to 1,700 new outlets to be established this year would be located in lower-tier cities or strategic places such as transport hubs or tourist destinations.
“Looking toward the future, we are absolutely confident in seizing China’s vast opportunities. We are expanding … through a multifaceted approach with flexible store formats, strategic franchising and a range of exciting products across price points.”
Yum China reported a net profit of US$287 million for the three months ending March, down 0.7 per cent from the same period a year ago. Revenue edged up 1 per cent on the year to US$2.96 billion. Its same-store sales, however, slipped 3 per cent from the year-ago period.
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An overall weak consumer market in China as people worry about their wage growth and job prospects has prompted restaurant chain operators to launch more value-for-money menus to lure budget-conscious customers.
