Yum China sticks to dine-in, expansion plans post-virus
The company turned a profit despite being hard-hit by the pandemic.
Yum! China is firm that Chinese consumers will still dine-in even after the coronavirus crisis and plans to open more Pizza Hut and KFC outlets in China’s smaller cities in the coming months, according to its chief executive.
“If you want to have Western food, or a cup of fresh ground coffee, where can you go? Even the hotels don’t have it. KFC is the only choice,” CEO Joey Wat said in an interview with Reuters. “We will continue to be committed to the China market and we are here to stay for long.”
The fast food operator emerged from the first quarter in profit despite the disruptive effects of the COVID-19 pandemic on sales and operations, citing its digital infrastructure as an effective means to reach out to customers.
Revenue was down 24% but the company reported an operating profit of US$97 million. Total sales were at US$1.75 billion, down from US$2.3 billion.
Yum! China also opened 179 new stores during the quarter, with most prior to Lunar New Year, extending its store count to 9,295 across more than 1400 cities.
The company began temporarily closing stores in late January, with some 35% of stores closed by mid-February at the peak of the outbreak. As of last week, approximately 99% of stores in China are either partially or fully open.
Delivery sales accounted for 35% of total sales throughout the quarter, an increase of 16% year over year.
