Yum feels the heat in China
KFC owner's sales fall blamed on lack of focus on cold drinks and ice cream amid hot weather
The heat seems to be getting to KFC parent Yum Brands on the mainland, after the fast-food chain saw China sales slide in July, with some market watchers saying a lack of focus on cooling drinks and ice cream meant diners looked elsewhere as record hot weather gripped the country.
On Monday Yum reported a much steeper-than-expected 13 per cent drop in July sales at established restaurants on the mainland as the firm strives to bounce back from double blows of a food safety scare and bird flu outbreak in its top market.
The sales decline was something of a setback for Kentucky-based Yum, which in recent months had seen same-restaurant sales declines ease.
"Because of the heat people were looking for cold drinks and ice cream, so McDonald's, Starbucks and Haagen-Dazs have been grabbing more share of the late afternoon and evening dining because they have better ice cream and drinks," said Shanghai-based Shaun Rein, managing director of China Market Research Group.
A review of KFC's China website yesterday backed this up, with almost every advertisement for hot food. McDonald's, meanwhile, had promotions for its ice cream McFlurry and shaved iced drinks specifically targeting an Asian market.
