- Milestone Store Opening
Underscores KFC's Continued Success as the Leading Restaurant Brand
in China
- KFC China's Ambitious
Growth Trajectory: Targeting Over Half of China's Population by
2026
SHANGHAI, Dec. 15,
2023 /PRNewswire/ -- Yum China Holdings, Inc. (NYSE:
YUMC and HKEX: 9987, "Yum China" or
the "Company") today celebrated the opening of KFC China's
10,000th store, marking a significant milestone in KFC
China's 36-year growth journey in the country.
Situated in Hangzhou, KFC
China's 10,000th store is located on the banks of the
Beijing-Hangzhou Grand Canal, a historically important link
connecting northern and southern China. Since opening its first
store in Beijing in 1987, KFC has
grown into the country's largest QSR brand in terms of system
sales. This growth has been underpinned by a world-class in-house
supply chain management system developed over three decades.
"As the first western QSR restaurant brand in China to reach this incredible milestone, KFC
China's 10,000th store opening is a proud moment for all of us,
demonstrating the brand's deep bond with Chinese consumers across
generations for over 36 years. Strategically positioned for
sustained growth, KFC China stands to benefit from its large and
rapidly expanding store network, substantial economies of scale and
access to an even broader customer base," said Joey Wat, CEO of Yum
China. "Presently serving just one-third of China's
population, our goal is for KFC China to reach over half by 2026.
By leveraging our solid foundation of success and tremendous
untapped potential for future growth, we are confident that KFC
China will continue to be China's leading restaurant brand for many
years to come."
"In pursuit of our ambitious growth targets, we are committed to
establishing KFC China as the preferred daily choice for an
increasingly diverse customer base," said Warton Wang, General
Manager of KFC China. "KFC China remains at the forefront of
pioneering new formats and groundbreaking concepts to accelerate
store expansion into untapped cities, while also staying ahead of
evolving consumer preferences and emerging consumption trends.
Going forward, KFC China will continue to offer a diverse array of
innovative meal choices across price ranges, ensuring that
consumers can enjoy KFC anytime and anywhere."
Strategic Footprint Expansion for Greater Reach
Despite having already established an extensive presence in over
1,900 cities as of the end of Q3 2023, KFC China continues to
actively expand its addressable market, with 1,100 untapped cities
on the brand's radar for entry. Over the past five years, KFC China
has seen remarkable growth, with average annual growth in net new
KFC stores exceeding 22%, all while maintaining an average store
payback period of approximately two years. At the same time, KFC
China has been accelerating store openings in lower-tier cities
while increasing store density in higher-tier cities.
Innovative Offerings to Satisfy New Demand
Through the introduction of innovative products and development
of new categories, KFC China is proactively broadening its consumer
base and catering to the evolving needs of Chinese consumers.
Recent successes include the introduction of Juicy Whole Chicken
and Beef Burgers, with both products generating annual sales
exceeding $100 million. KFC China is
also widening its menu to introduce more entry-level price point
offerings, ensuring its products better cater to the needs and
preferences of a broader range of consumers. Meanwhile, KFC China
continues to expand its in-house coffee brand, KCOFFEE, aiming to
open more than 300 standalone KCOFFEE stores by the end of
2024.
Revolutionizing Convenience and Accessibility in Delivery
Services
In tandem with increased store density across various regions,
KFC China is redefining convenience and making its delivery
services more accessible. Notably, a double-digit surge in
small-ticket delivery orders of 40
RMB or less across major fast food players represents an
area of opportunity for KFC China.
Furthermore, KFC China has showcased a steadfast commitment to
maintaining robust margins, enabled by procurement excellence,
continuous product innovation, and full chicken utilization.
Additionally, the brand has embraced cutting-edge technologies,
including in-store Internet of Things (IoT), automation, and
artificial intelligence (AI) to enhance operational efficiency.
Looking forward, KFC China plans to further accelerate its
annual net new store openings to exceed 1,200 in the next three
years, with 15% to 20% expected to be franchise stores, aligning
with Yum China's overarching goal to
reach 20,000 stores by 2026. KFC China's future strategy
encompasses a diverse range of store models and modules – ranging
from standard stores to future concept stores, mini-stores, and
stores strategically positioned in lower-tier cities. This approach
underscores KFC China's commitment to innovation-empowered growth
and adaptability in the dynamic Chinese market.
Forward-Looking Statements
This press release contains "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, including
statements regarding the Company's business strategy and capital
allocation strategy. We intend all forward-looking statements to be
covered by the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements generally
can be identified by the fact that they do not relate strictly to
historical or current facts and by the use of forward-looking words
such as "goal," "expect," "expectation," "believe," "anticipate,"
"may," "could," "intend," "belief," "plan," "estimate," "target,"
"predict," "project," "likely," "will," "continue," "should" or
similar terminology. These statements are based on current
estimates and assumptions made by us in light of our experience and
perception of historical trends, current conditions and expected
future developments, as well as other factors that we believe are
appropriate and reasonable under the circumstances, but there can
be no assurance that such estimates and assumptions will prove to
be correct. Forward-looking statements include, without limitation,
statements regarding the future strategies, growth, business plans,
investment, earnings, performance and returns of Yum China,
anticipated effects of population and macroeconomic trends, pace of
recovery of Yum China's business,
the anticipated effects of our innovation, digital and delivery
capabilities and investments on growth and beliefs regarding the
long-term drivers of Yum China's
business. Forward-looking statements are not guarantees of
performance and are inherently subject to known and unknown risks
and uncertainties that are difficult to predict and could cause our
actual results or events to differ materially from those indicated
by those statements. We cannot assure you that any of our
expectations, estimates or assumptions will be achieved. The
forward-looking statements included in this press release are only
made as of the date of this press release, and we disclaim any
obligation to publicly update any forward-looking statement to
reflect subsequent events or circumstances, except as required by
law. Numerous factors could cause our actual results or events to
differ materially from those expressed or implied by forward-
looking statements. In addition, other risks and uncertainties not
presently known to us or that we currently believe to be immaterial
could affect the accuracy of any such forward-looking statements.
All forward-looking statements should be evaluated with the
understanding of their inherent uncertainty. You should consult our
filings with the SEC (including the information set forth under the
captions "Risk Factors" and "Management's Discussion and Analysis
of Financial Condition and Results of Operations" in our Annual
Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q)
for additional detail about factors that could affect our financial
and other results.
About Yum China Holdings, Inc.
Yum China is the largest
restaurant company in China with a
mission to make every life taste beautiful. The Company has over
400,000 employees and operates over 14,000 restaurants under six
brands across 1,900 cities in China. KFC and Pizza Hut are the leading
brands in the quick-service and casual dining restaurant spaces in
China, respectively. Taco Bell
offers innovative Mexican-inspired food. Yum China has also partnered with Lavazza to
develop the Lavazza coffee concept in China. Little Sheep and Huang Ji Huang specialize in Chinese cuisine.
Yum China has a world-class,
digitalized supply chain which includes an extensive network of
logistics centers nationwide and an in-house supply chain
management system. Its strong digital capabilities and loyalty
program enable the Company to reach customers faster and serve them
better. Yum China is a Fortune 500
company with the vision to be the world's most innovative pioneer
in the restaurant industry. For more information, please visit
http://ir.yumchina.com.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/kfc-china-celebrates-the-opening-of-its-10-000th-store-302016786.html
SOURCE Yum China Holdings, Inc.