Yum Sales Tumble in China

Yum Brands Inc. (Louisville, Ky.), one of the more successful international food operators, has announced a same-store sales decrease in China in the third quarter.

Yum, operator of the KFC fast-food chain, gets about 75 percent of its revenue from outside the U.S. In China, it is facing new competition, from expanding restaurant chains, such as Dicos and Hua Lai Shi. It’s also facing a backlash from Chinese consumers after an outbreak of avian flu scared diners away from poultry, and a former chicken supplier was investigated for selling food with too much antibiotics.

Yum’s same-store sales in China fell 11 percent.

“It’s just taking a little longer than we expected 'for China to recover,” said Yum spokesman Jonathan Blum in an interview with Bloomberg Businessweek. “While consumer trust in KFC has improved in the Asian country, 'it’s not exactly back to where it was.'”

Yum, which has more than 6000 KFC, Pizza Hut and other stores in China, has been trying to attract customers there with an ad campaign telling people it’s safe to eat properly cooked chicken. The company, which is targeting young families with the advertisements, also is promoting other proteins in China, such as shrimp and mushroom rolls.