For nearly two decades in China, the KFC logo has enticed the hungry with the promise of juicy, crispy chicken.
Now, Yum Brands Inc. — which owns KFC and Pizza Hut as well as Taco Bell in the U.S. — has some competition for the cravings of Chinese diners.After watching Yum gobble up much of China’s emerging middle class, McDonald’s, which has 800 restaurants in operation in China, is ramping up development in the country.
“The businesses are years apart maturity wise, but we believe Yum’s business can remain the primary driver of corporate profitability and McDonald’s’ business can become a measurable contributor to its own,” said J.P. Morgan analyst John Ivankoe in a note to investors, after he met with both companies’ teams in China last week.
At Yum, the China business helped hasten a recovery after a string of problems in its U.S. business, including an E. coli outbreak at some Taco Bell restaurants on the East Coast and a rat infestation at a KFC/Taco Bell franchise store in New York City.
“It is clearly our number one growth strategy,” said Yum spokesman Jonathan Blum of the chain’s China operation.
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