Research firm predicts steady KFC China recovery

March 26, 2014

JL Warren Capital LLC, an independent equity research firm that focuses on the China market, says KFC China is steadily recovering from its sharp drop in sales last year, which stemmed from chicken supply chain concerns, as well as an avian flu outbreak.

The company surveyed hundreds of consumers outside KFC stores in 14 Chinese cities this month, and concluded that store traffic is getting back to the brand's 2012 levels.

According to a news release, consumers surveyed reported to be well aware of the bird flu outbreak in 2013, and the majority of them reduced visits to KFC during the period. JL Warren Capital's offline survey indicated that the bird flu concern was almost completely over.

The firm also conducted online surveys from hundreds of consumers residing in tier 2, 3, 4 and 5 cities who have visited KFC at least once within the past two months. Survey results show that KFC China is gaining traction in lower-tier cities.

"Based on our proprietary online and offline surveys, we believe that the Yum! recovery story is unfolding better in 2014 than we had expected, and the company's penetration into lower-tier cities will garnish compelling returns on investment. In 2014, we are seeing KFC China bounce back to the 90-95 percent same-store sales level of 2012," the company said.

Topics: International , Trends / Statistics

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