February 28, 2024

Kentucky-fried chicken wings are once again winning Chinese hearts and yen.

KFC sales in China bounced back in 2023, growing an “impressive” 20%, the chief executive of its parent company Yum! Brands told investors Wednesday (Feb. 7). That’s a big jump, considering that KFC sales dipped in the nation in 2022 and Chinese consumer sentiment remains low.

The rising popularity of KFC in China helped prop up the brand last year, with KFCs in the country making up nearly 30% of all global sales (pdf).

Even as the brand’s sales were flat in the US in the fourth quarter, they grew 18% in China.

China’s fast food battle: KFC faces McDonald’s

Fast food is becoming more and more popular among Chinese residents, with KFC historically taking the top spot. The country has more than twice the number of KFC locations than the US, with 10,000 restaurants in total.

McDonald’s recently surpassed KFC as the nation’s most-loved chain, according to a survey last year from China Business Network (CBN), the country’s largest financial media outlet. But recent earnings reports from the companies suggest that Kentucky-fried chicken buckets are catching up to McNuggets.

While KFC sales saw robust increases at the end of 2023, McDonald’s reported weak sales growth in the country during the fourth quarter. Chinese McDonald’s also accounted for about 4% less of the company’s global revenue last year than it did in 2022, according to a FactSet analysis.

China is KFC’s golden nugget

China is much more important to KFC’s success as a brand than it is to McDonald’s. While it made up about one third of KFC’s total revenue in 2023, it accounted for just 3% of McDonald’s, according to FactSet.

McDonald’s executives pointed to “slowing macroeconomic conditions” and record-low consumer confidence in China as reasons for the weaker-than-expected growth. But the KFC rival is still continuing its aggressive plan to open more locations in China. McDonald’s opened 1,000 new restaurants there in 2023 and plans to open 1,000 more this year as part of its massive global expansion, the company said Monday (Feb. 5).

Luckily for KFC fans, the company has implemented a growth strategy of its own, having opened about 2,700 new locations globally in 2023.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *