KFC is suddenly doing well in China, just as parent Yum Brands exits the country

Happy days.
Happy days.
Image: Reuters/Kim Kyung Hoon
We may earn a commission from links on this page.

Now that Yum Brands is getting out of China, the company’s KFC restaurants there are suddenly booming.

Yum said this week that same-store sales at all of its China outlets rose by an estimated 5% in October (pdf). That’s slightly below the 6% growth it recorded for September, and good enough to keep Yum on track for what could be its best quarter in China in over a year. Sales at its KFC restaurants were particularly strong; Yum estimated that same-store sales at the fried chicken brand had increased by a whopping 10%, only to be offset by a 9% decline in Pizza Hut receipts.

Yum, which also owns Pizza Hut and Taco Bell, as well as some Chinese brands like Little Sheep, said last month that it was spinning off its China unit, which includes nearly 7,000 restaurants and accounts for more than half of Yum’s operating profit.

The spin off came after Yum struggled to consistently grow sales at its China restaurants:

KFC in particular faces stiff competition from growing local Chinese brands and a stream of food safety scares. It hasn’t helped itself by producing some of the slowest fast food in all of China.

Yum forecasts its fourth quarter same-store sales growth for China will be between 0 and 4%. If sales grow at all, that will mark Yum’s first two consecutive quarters of sales growth in China for over a year.