Sales at KFC chains in China fell 13% in March, the fast food chain’s parent company Yum Brands said today (April 10), citing the outbreak of a rare and mysterious form of avian flu, H7N9 that has left 9 dead in the country.
But it’s not just bird flu that’s hurting Yum. The Kentucky-based company is still reeling from the discovery it was selling doped up chicken to unsuspecting Chinese last year. Same-store sales at its restaurants in China, which include Pizza Hut and KFC, fell 20% in the first quarter, and the company had to issue a contrite apology to customers.
In a country where residents are particularly jittery over real, as well as rumored, food safety scares, it would seem that Yum’s KFC chain is especially vulnerable to the recent bird flu outbreak. But the size of Yum’s business on the mainland likely makes up for these occasional hiccups. More than half of Yum’s revenue and profit come from its restaurants in China, where it is the biggest foreign food chain. Moreover, Yum has managed to recover from past crises. During the SARS outbreak of 2003, sales dropped between 20% and 30% for a few weeks but recovered. Sales also remained steady amid an avian flu outbreak across Asia in 2004.