From octopus Pizza Hut pies to spicy Quarter Pounder hamburgers, U.S. fast food is undergoing major changes in China as restaurant titans like Yum Brands and McDonald’s Corp. vie to dominate a market they say could approach or exceed business at home.
For nearly 20 years, McDonald’s and Yum Brands Inc.’s KFC chain have been selling burgers and fried chicken in China, the world’s most populous nation.
In the last four years, however, China’s economic growth has skyrocketed — to over 10 percent a year — and its citizens are enjoying much greater spending power.
Add to that cheap food costs and low wages, and U.S. chains say they will be able to open dozens of stores a year and enjoy strong sales and profit increases in China for years to come.
Still, challenges remain. Transporting goods in areas without adequate road systems is difficult, the labor market has tightened, and many Chinese consumers still cannot afford to eat out all the time.
Fu Mei takes her 6-year-old grandson to a McDonald’s restaurant in Tianjin — the third largest urban area in Mainland China — about once a week. But after spending 14 yuan ($1.79) on a Filet-o-Fish sandwich for the boy, she and her husband cannot afford to eat there themselves.
“It’s expensive,” she said.
Chains said they must be vigilant about what they charge for food in China, where incomes are modest compared with the United States.
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