The KFC restaurants in China have radically changed in the last year. And they recovered from a difficult situation by focusing more on Wi-Fi than on chicken.
After the epidemic bird flu and the antibiotic-tainted poultry scandal, that caused a 4% down in sales in 2013, the Yum Brands (owner of Pizza Hut and KFC in China) started a dramatic makeover of KFC, from a place where you can eat fast inexpensive food to a relaxing place where you can spend your time and linger over your meals.
The new restaurants have wooden furniture, soft low-hanging lighting, and free WiFi. The space is suitable for business meetings, to hang out with friends, and you can surf online in a relaxing place without being interrupted.
Now KFC restaurants in China seem more like Starbucks than MacDonald’s. “The new designs will offer more quality service and a comfortable environment for social interaction and business meetings,” Su Jingshi, the chairman and CEO of Yum Brands in China, told China Daily.
Thanks to this turnover, the net income for Yum Brands rose 19% in the second quarter of 2014 ($334 million), from $281 a year earlier. “Yum is recovering better than we expected in China due to its renovated menu and marketing campaign starting at the end of March,” said Junheng Li of Warren Capital.
As the #1 foreign brand in China, KFC has 4,800 units in 1,000 cities. This is more than twice the size of their nearest competitor.
“The opportunities are tremendous. I have no doubt KFC will be an even stronger leading brand as we evolve our strategy for the changing Chinese consumer, making KFC more contemporary, engaged and connected” said Greg Creed, CEO Yum! Brands Inc.