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Tag: KFC

  • Yum China speeding up expansion plans

    Yum China speeding up expansion plans

    Yum China plans to invest up to US$525 million opening between 800 and 850 new stores in the current financial year.

    Most of the new stores will be KFC outlets and of its new cafe chain Coffii & Joy.

    The protections were included in the company’s second-quarter results released overnight, which showed total system sales up 10 percent year on year to US$2.12 billion, with KFC leading the way at 12 percent. Sales at Pizza Hut rose by 4 percent.

    While sales were up, much of the growth was driven by network expansion. Same-store sales grew 4 percent, with a 5-per-cent increase at KFC and a 1-per-cent increase at Pizza Hut.

    Restaurant margin slipped from 15.1 percent to 14.7 percent, however, operating profit rose 6 percent from $193 million to $204 million.

    Net Income increased 24 percent from $143 million to $178 million, primarily due to the increased operating profit and a gain from the company’s equity investment in Meituan Dianping.

    During the quarter, Yum China opened 178 new restaurants taking its store count to 8751 across more than 1300 cities.

    “We continued to capitalise on market opportunities across China with aggressive, KFC-led store expansion,” said Yum China CFO Jacky Lo. “With a strong cash payback period for new KFC stores and many untapped opportunities, we intend to continue to rapidly expand our store footprint in the second half of the year.

    “Looking forward, we expect overall sales growth to moderate as KFC begins to lap several key sales drivers, including successful value campaigns that we initiated in the second half of last year. However, we remain confident that our strong foundation and commitment to innovation throughout our business will power continued growth for Yum China. We will continue to create new and exciting menu items, and leverage our leadership in digital, data and delivery to meet the evolving needs of our consumers.”

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  • KFC invests millions in drive-thru-only restaurants

    KFC invests millions in drive-thru-only restaurants

    Quick service restaurant KFC announced last week it is investing $1.5 million in a “completely new concept for the fast-food industry” – a first of its kind drive-thru-only restaurant.

    Located in Newcastle, NSW, the store will feature five lanes and will utilize new technology to improve efficiency and speed in order from the on-site kitchen.

    Customers will be able to order and pay via the KFC app or website before arriving at the restaurant, and they will receive a four digit code to enter on a touchscreen receiver when they pull up to concept store, which sends the order to be prepared.

    Construction started in late June, and the restaurant is set to open in early November. The company said it potentially will roll out more drive-thru-only locations across Australia.

    “Drive-Thru Only is the latest example of KFC’s commitment to innovation, and to giving Aussies the most delicious and fresh chicken possible,” KFC Australia’s chief marketing officer Kristi Woolrych said.

    “We’re dedicated to continually building on our customer offering, that we’re always providing delicious and fresh meals, in the most convenient way to meet their busy lifestyles.”

    The store was conceptualized after KFC saw its e-commerce offering surge in popularity, with online ordering growing 100 per cent year on year for the last five years straight.

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  • KFC Hong Kong tests new concept store format

    KFC Hong Kong tests new concept store format

    Fast-food chain KFC Hong Kong has opened a new concept store format in Causeway Bay.

    The new three-storey store, which seats 150, aims to enhance the traditional fast-food dining experience with a chic style. It features a street-level kiosk offering desserts and ice creams, while the first floor has self-ordering kiosks with modern bar stools.

    The second floor is a dining area where the walls are decorated with murals. Three-dimensional art installations have been installed at each stairway, allowing customers to take instagrammable photos.

    “KFC is evolving,” said KFC Hong Kong and Macau CEO Janet Yuen. “We uplift the traditional fast-food experience and maintain brand authenticity with a more relaxed and chic cafe style.

    “The concept store is to create a trendy socialising hub, enabling our customers to enjoy valuable moments with friends.”

    The outlet has also introduced freshly cooked-to-order food items as the restaurant chain aims to uplift its fast-food dining experience in a more comfortable, trendy setting.

    Local franchisee Jardine Restaurant Group operates more than 810 outlets for KFC owner Yum! Brands, with operations under Pizza Hut in Taiwan, Hong Kong, Macau, Vietnam and Myanmar together with KFC in Hong Kong, Macau, Taiwan and Vietnam.

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  • KFC India to sell 61 another stores

    KFC India to sell 61 another stores

    KFC India will offload 61 equity-owned restaurants to Devyani International as part of its international strategy to withdraw from capital-intensive operations while further developing its brand.

    Devyani, KFC owner Yum!’s biggest franchise partner in the territory, will take over the locations in Karnataka, AP and Telangana, dropping Yum!’s company-operated KFC locations within India to less than 10 per cent. Yum!’s other brand in India, Pizza Hut, is already fully franchised out, and Devyani operates almost 500 outlets under both brands in India.

    “We continue to re-evaluate ownership strategy as part of an annual process and in line with business growth,” said KFC India MD Samir Menon. “The strategic intent is to unlock growth for the brand.”

    “At this point, there is no intent to set up more equity restaurants, unless the market dynamics demand,” he added.

    “KFC is one of the fastest growing brands in our portfolio,” commented Devyani’s CEO Virag Joshi. “Our partnership with Yum! is driven by commitment to build the brand by expanding geographic presence and driving world-class operations.”

    More than 98 per cent of KFC’s 140-country international store network is operated under franchise agreements.

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  • Serving You in Style with KFC x Thomas Wee

    Serving You in Style with KFC x Thomas Wee

    What’s cookin’, good lookin’? Following the success of our first-time limited edition sneaker drop, KFC Singapore is launching a collection of stylish apparel in collaboration with one of Singapore’s award-winning designers, Thomas Wee. And this time, in the form of brand-new on-fleek uniforms for every member of the KFC family.

    More than a sartorial overhaul, the launch of KFC x Thomas Wee is a tribute to the phenomenal people who built KFC to what it is today, and an appreciation of their individual roles, contribution, and dedication to excellence every day.

    With the launch of KFC’s new uniforms, we hope that every one of our KFC family members will feel the pride and appreciation that we have for them. Because it’s all about being our best selves and so that we can make a difference   Lynette Lee, General Manager of KFC Singapore

    Designed and created by Thomas Wee, the new uniforms mark the first time that KFC will be collaborating with a local fashion designer on such an endeavor, as well as the first time Thomas Wee will be designing for a local F&B brand in almost 40 years of his illustrious career. As opposed to the previously standard uniform of a red dry-fit polo tee, this latest venture boasts not one, not two, but four different types of designs that cohere with each KFC crew member’s role and responsibilities so that you’ll know who to look for when you’re dining at KFC. In addition, all designs were thoughtfully crafted to maximize peak comfort and functionality for every member of the KFC family.

    I was inspired by KFC’s show of appreciation for every single one of their staff members and this translated to my approach to the designs. I wanted to create a collection of uniforms that will look smart on every one of the KFC team, regardless of gender, age, skin tone or size. I hope the new uniforms will boost the morale of the service team and allow everyone to feel confident and excited to wear them in the day-to-day! Thomas Wee, veteran designer

    What’s more, in conjunction with the launch of KFC x Thomas Wee collaboration, we are working with KFC crew members and local visual artist Izzraimy, co-founder of the Island Boys Collective, on a photoshoot that celebrates our diverse KFC family.

    Pop over to check out these uniforms in action in all KFC outlets across Singapore come July, while tucking into your favorite finger-lickin’ good chicken!

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  • Restaurant Brands is Expanding Again

    Restaurant Brands is Expanding Again

    KFC Australia enjoyed a 6 per cent increase in same-store sales in its first quarter of FY19 and a 1.9 per cent increase in total sales, despite the temporary closure of several stores for refurbishments.

    KFC saw $37.3 million (NZ$39.7m) in same-store sales and $40.7 million in total sales in the quarter.

    This helped drive total sales for parent company Restaurant Brands up 1.6 per cent to $182.8 million, due to increased same-store-sales in all of its markets; Australia, New Zealand, and Hawaii.

    In New Zealand, KFC saw a same-store sales increase of 5.2 per cent to $73.8 million (NZ$78.4m), up from $70.2 million (NZ$74.6m) during Q1 of FY18. Restaurant Brand’s Pizza Hut operations in New Zealand, however, saw a significant drop in sales over the period.

    While same-store sales fell 4.6 per cent, the pizza chain’s total sales fell 16.1 per cent to $7.2 million (NZ$7.7m), compared to the $8.57 million (NZ$9.1m) seen during the same period of FY18.

    Looking forward, Restaurant Brands’ management notes that it is no secret they intend to turn the operation into a billion-dollar company, in both market capitalisation and in total revenue.

    “As to our total revenue, in just over two years we’re well on the way having doubled in size through international acquisitions,” the group wrote in a statement to shareholders.

    “Now that consolidating new operations and transitioning the company to a new ownership structure are behind us, we are set to resume our aggressive expansion strategy with gusto.”

    Over the next five years, the group expects to open 30 new KFC stores across Australia and New Zealand, acquire independent KFC franchises in Australia, launch and roll out Taco Bell in New Zealand and Australia and establish a larger presence in the United States.

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  • Chinese KFC restaurants struggles as chicken prices Increases

    Chinese KFC restaurants struggles as chicken prices Increases

    Chinese KFC restaurants have begun serving parts of chickens not used before in response to rising costs.

    According to Yum China CEO Joey Wat, the KFC brand introduced new chicken cuts in the first quarter from “a part of the chicken that we somehow have not used in the last 30-some years”. The cut is a portion between the wing and the breast.

    The elevated poultry costs are largely attributed to a spin-off effect from the impact of African Swine Fever on the pork market as well as the current trade war with the US.

    The costs have seen KFC’s operating margin reduced to 18.7 per cent from the previous 20.6 per cent, despite a rise in same-store sales of 5 per cent. KFC has faced commodity inflation of 5 per cent in the first quarter, according to the company’s earnings call.

    “We expect poultry inflation to weigh on margins for the rest of the year,” said Yum China CFO Jacky Lo.

    Wat stated that the chain may be turning to new technology to save its declining margins in the hope that such technology can provide “another way to cut out chicken.”

    The brand may also introduce “some sort of ingredient” other than chicken “that probably has not been used before.”

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  • KFC Singapore debuts open-kitchen restaurant at Tampines Mall

    KFC Singapore debuts open-kitchen restaurant at Tampines Mall

    KFC Singapore has launched its first Southeast Asian open-kitchen restaurant at Tampines Mall, revealing how its chicken is prepared.

    The fast-food giant’s Open Kitchen program, also called ‘The Tank’, has already been rolled out in the UK, Ireland, Australia and Japan.

    “With the rollout of the ‘The Tank’ at KFC Tampines Mall and the KFC Open Kitchen program, I hope to proudly share KFC’s heritage and Colonel Sanders’ obsessive passion in cooking the best-tasting chicken,” said Lynette Lee, KFC Singapore GM.

    The chain also plans to host guests on ‘insider tours’ where visitors can watch staff perform Colonel Harlan Sanders’ “7-10-7” technique.

    Beginning today, guided 35-minute tour sessions of KFC kitchens at selected outlets, including Kallang, Waterway Point, Toa Payoh Lorong 6, Jurong Point and Northpoint City, will be available for booking online through KFC Singapore’s website.

    Tours cost $15, including a two-piece KFC chicken meal and a goodie bag. Visitors will get to see the kitchen’s storage area, the chicken breading and preparation stations, and the service counter area.

  • Mexican investor Bought three quarters of Restaurant Brands

    Mexican investor Bought three quarters of Restaurant Brands

    Restaurant Brands has announced Mexican investor Finaccess Capital SA de CV now has a controlling stake in the company after acquiring three quarters of the company’s shares.

    The deal closed on March 26 following Finaccess’ offer through its subsidiary, Global Valar SL, for up to 75 per cent of Restaurant Brands New Zealand shares at NZ$9.45 cash per share.

    Finaccess informed Restaurant Brands, the New Zealand franchise operator of Pizza Hut, KFC and Carl’s Jr, on Tuesday that it has paid shareholders for shares taken up under the partial takeover.

    The Mexico-based company, which also has a stake in AmRest, which operates KFC and Pizza Hut among other brands across Europe and China, said in its offer letter last year that it chose not to make a full takeover bid because there were benefits to Restaurant Brands remaining on the NZX and ASX.

    “By remaining a public company, Restaurant Brands will have access to capital to fund future growth while also providing existing shareholders an opportunity to continue participating in the business over the long term,” Finaccess said at the time.

    Restaurant Brands today also announced the appointment of Jose Pares Gutierrez and Emilio Fullaondo Botella as directors, and resignation of Stephen Copulos, Vicky Taylor and David Beguely as directors.

    As required by the NZX Listing Rules, Gutierrez and Botella will each stand for re-election at Restaurant Brands’ next annual meeting of shareholders.

    Ted van Arkel and Hamish Stevens will each remain on the board as independent directors, and Van Arkel will continue as chairman, until Restaurant Brands’ next annual meeting of shareholders on July 10. Both have announced their intention to retire as directors at the conclusion of that meeting.

    Gutierrez, the CEO of Global Valar SL and its parent, Finaccess Capital, is also the chairman of the board and a proprietary director of AmRest Holdings SE, the director of the board of Crown Imports, Chicago, Il, vice chairman of the board of MMI, Toronto, Canada, director of the Board of DIFA, Mexico, and former member of the Beer Chamber of Mexico.

    Botella, a senior executive with over 23 years of experience in the beer industry, has previously worked in a number of finance roles for Grupo Modelo, including four years as chief financial officer.

    Following the acquisition of Grupo Modelo by AB InBev in 2013, Gutierrez oversaw significant cultural and organisational changes at AB InBev (Mexico) as vice president, human resources (to 2017) and vice president, Projects until his resignation in January 2019.

  • The future of retail has arrived

    The future of retail has arrived

    Once upon a time, the future seemed a long way off. Remember Tom Cruise in 2002’s Minority Report? And the famous shopping centre scene?

    Director Steven Spielberg recruited a panel of futurists to predict a far-off tomorrow that included responsive, personalised advertising and sales assistants, triggered by iris and facial recognition.

    Well, today, we’re living in that future. Geo-location is ho-hum, facial recognition is a feature built into our phones and Alibaba in China has already tested “smile to pay” in kiosk screens in KFC stores, that replace the need for a wallet.

    Way back in 1994 (was that really 25 years ago?) American phone carrier AT&T ran a TV ad that forecast a future where shoppers could check out “a whole shopping cart at a time” through a scanner, and you could receive “a phone call on your wrist”.

    Fast forward to today, and frictionless grocery retail is a reality with Amazon Go stores (now rolling out across the US), and when I visited one in Seattle recently the receipt was pinged to my Apple Watch along with my trip time. Shoppers are actively gamifying grocery shopping, seeing how fast they can get in and out of the store.

    AmazonGo receipts are pinged to your wrist.

    The future, as science fiction writer William Gibson famously wrote, is already here. It’s just not very evenly distributed. Or, as Matt Thompson from American grocery giant Kroger put it even more succinctly: “The future is now”.

    I see examples of the “future of retail” in the US every day. Creator Burger in San Francisco has a burger-making robot. Nordstrom’s “Local” retail concept centres around click-and-collect, and services, and has no stock in store. Amazon’s 4-Star stores stream ratings and reviews live to the shelf. Kroger is testing self-driving grocery delivery vehicles with Nuro in Arizona.

    China takes things to a whole new level. When I attended Singles’ Day in China last year, I witnessed first-hand a shopping culture that was more “Bladerunner” than suburban mall. There, the mobile rules and stores are not destinations but “nodes”, designed to be interacted with both physically and virtually as the need fits. (My colleague in China ran out of garlic while cooking at home. No problem – he jumped on his app, and had the ingredient delivered in time to finish preparing the meal.)

    As I write this, I am about to return to Australia for a visit. I can’t wait to share my experiences and observations of perhaps the most dynamic time in the history of retail. At the same time, I’m also looking forward to seeing what’s new and exciting in our part of the world. The truth is that, particularly today, the future of retail is not limited to a geographic region. From Telstra stores to innovative supermarket and convenience store design, there is a lot to learn from what’s going on in the Southern hemisphere. You just have to look. Because the future is already here.

  • Finaccess takeover of Restaurant Brands

    Finaccess takeover of Restaurant Brands

    Investment firm Finaccess’ takeover bid for quick-service group Restaurant Brands has been declared unconditional, with the firm accumulating 61.73 per cent of shares in the business.

    While the firm’s offer specifies it is seeking 75 per cent of shares in the business, it was able to declare the offer unconditional should it reach over 50 per cent.

    Shares in the business spiked almost 2 per cent after the news, increasing 17 cents to $8.92 per share, though the offer is paying $9.45 per share.

    Group chief executive Russel Creedy was among those who decided to sell shares, offering up his 571,601 share stake in the business – an offer worth approximately $5.4 million.

    While the offer is now considered unconditional, the end date has been automatically extended to 26 March, and the Restaurant Brands board continues to recommend shareholders accept the partial takeover for their shares in the absence of a greater offer.

    The QSR group declared it had increased full-year sales to $794 million last week, due to strong growth in the KFC business in Australia and New Zealand.

    KFC New Zealand saw sales increase to $336.5 million, a 5.3 per cent increase over the previous period, while Australian operations saw 27.8 per cent sales growth to $178.3 million.

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  • KFC poised to expand after strong full year sales

    KFC poised to expand after strong full year sales

    Restaurant Brands is planning to expand the number of KFC restaurants it operates across Australia and New Zealand off the back of strong sales over the 12 months to February 2019, which contributed to the group’s overall 7.2 per cent increase in full-year sales of $764.6 million (NZ$794 million).

    In Australia, KFC’s sales grew 27.8 per cent to $178.3 million, thanks to new store acquisitions in the period. Same-store-sales grew 4.7 per cent.

    Starbucks saw a 4 per cent increase in sales to $15.4 million, and was sold to Tahua Capital on 23 October 2018.

    Carl’s Jr., however, saw an 8.8 per cent decline in total sales to $30.7 million. Same-store-sales also fell 3.3 per cent over the year.

    The group’s performance in New Zealand was more varied.

    KFC’s New Zealand operations improved 5.3 per cent over the period to $324 million (NZ$336.5 million), and 4.3 per cent on a same-store basis, while Pizza Hut faltered – seeing a 14 per cent decrease in sales over the year to $34 million (NZ$35.4 million), down 6.1 per cent on a same-store basis.

    The group is currently in the midst of a partial takeover, with investor Finaccess Capital having proposed to acquire up to 75 per cent of the group’s shares for a premium of NZ$9.45 ($8.68) cash per share.

    Restaurant Brands shares currently sit at $7.33 on the ASX, and $NZ8.62 on the NZX. Currently, Finaccess has secured 33.71 per cent, or just over 42 million, shares.

    The board of Restaurant Brands “unanimously” recommends shareholders accept the partial takeover offer, which closes on 12 March 2019, based on the absence of a superior proposal.

  • KFC China opens tribute to Lei Feng

    KFC China opens tribute to Lei Feng

    KFC China has held a promotion honouring Communist Lei Feng. The “Lei Feng Spirit” promotion was first launched in the legendary young soldier’s home province of Hunan on the national holiday dedicated to his memory. The figure of Lei Feng has been considered an inspiration to the Chinese people since he was first held up as a figurative icon of the communist movement by leader chairman Mao Zedong.

    KFC China is celebrating “the Lei Feng spirit in its over 250 outlets in the province and encouraging its staff to learn from the role model,” according to local news outlet Xinhua.

    KFC’s operator Yum China has also opened a 27,000sqft innovation centre in downtown Shanghai. The integrated R&D facility is designed to generate new ideas and concepts and enable the rapid roll out of localised and innovative products.

    The centre features a test kitchen, a sensory test area, as well as a suite of labs covering quality assurance, equipment and restaurant technology testing, packaging innovation, new store model prototypes, and content production.

    “The establishment of the Innovation Centre is testament to our commitment and vision to become the world’s most innovative pioneer in the restaurant industry,” said Yum China CEO Joey Wat.

    “Through creating an integrated hub, we look forward to continuing to explore innovative ways to drive growth, deliver value, and enhance every aspect of the customer experience.”

  • Malaysia’s Kedai Ayamas Eatery plans 100 more stores

    Malaysia’s Kedai Ayamas Eatery plans 100 more stores

    Kedai Ayamas eatery operator Kara Holdings is looking to establish 100 outlets within four years through its new franchising program, predominantly within peninsular Malaysia. The move into franchising should elevate the company’s finances by 10 per cent this year to about RM40 million (US$9.85 million). Nine franchises have opened so far, with 20 more targeted within the year.

    “As Johor Corp’s wholly owned subsidiary, we complement the KFC business in terms of maximising the use and distribution of poultry products at the farm,” said Kara’s executive director Abd Rahman Md Dawi. “The poultry-relating business has always been a high-demand market for the food and beverage sector in Malaysia.

    “Last year, we registered a revenue of RM35 million [$8.6 million]”, he added. “With the additional franchise business, hopefully, it will amplify our revenue this year, coupled with Kara’s technological adoption of food delivery services such as Foodpanda and Grab-Food.”

    According to Dawi, the company is open to franchisee acquisition of Kara’s 40 corporate outlets. Six of the nine new franchises were acquired from the firm.
    “There are certain criteria that will be considered for us to sell our own shops, but we encourage the newcomers to open a new shop,” he said.

    Kara’s franchising program costs between RM100,000 and RM400,000 ($24,600–98,450), and includes management and operational training sessions.

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  • Yum China to face challenges this year

    Yum China to face challenges this year

    An aggressive store rollout program is helping Yum China achieve sales growth, but its Pizza Hut business continues to struggle. In year-end results released overnight, Yum China said fourth-quarter system sales rose 6 per cent in constant currency, but same-store sales rose by a more modest 2 per cent. The company, which owns the Chinese operations of KFC and Pizza Hut, opened 819 new stores last year, taking its combined network to 8484 stores across more than 1200 cities. The company plans between 600 and 650 additional stores this calendar year.

    For the full year, total system sales grew 5 per cent over 2017, with a solid 7 per cent growth at KFC partially offset by a 1 per cent decline at Pizza Hut, (excluding foreign exchange impacts). Same-store sales increased 1 per cent overall, up 2 per cent at KFC and down 5 per cent at Pizza Hut.

    Full-year revenue reached US$8.42 billion with net Income up 78 per cent to $708 million, from $398 million.

    Joey Wat, CEO of Yum China, said the results marked the ninth consecutive quarter of system sales growth since the company was spun off from former US parent Yum! Brands.

    “This strong growth was led by accelerated new store openings and a robust performance at KFC, which delivered 3 per cent same-store sales growth and 9 per cent system-sales growth during the quarter. Although Pizza Hut’s sales remained soft, we are pleased to see same-store traffic growth of 1 per cent and positive trends in customer feedback.”

    Wat said the aggressive store rollout program last year further strengthened the company’s market position, laying a solid foundation for growth.

    “While the macro backdrop is relatively soft, with our resilient business model and leadership in digital and delivery, we are confident that we have the right strategy and capabilities to maintain our growth trajectory and capitalise on the long-term potential of the China market,” she said.

    Among the highlights of last year was exceeding 160 million members of the company’s KFC loyalty program and 50 million members of the Pizza Hut program, increases of 50 million and 15 million, respectively.

    Mobile payments accounted for 65 per cent of the company’s sales in the fourth quarter, an increase of 11 percentage points year on year. Digital payments accounted for more than 86 per cent of company sales in the quarter, an increase of 14 percentage points.

    And delivery services – now offered in 1118 cities – accounted for 19 per cent of sales in the fourth quarter of 2018, an increase of three percentage points year on year.