Yum! Brands Inc. (NYSE:YUM) Plunge In China Same Store Sales
Northern, WI 05/13/2013 (gdpwatch) – The same stores sales of Kentucky Fried Chicken (KFC) run by Yum! Brands Inc. (NYSE:YUM) (Closed: $70.36, Up by 1.87%) had plunged by 29 percent in April due to concerns about safety of chicken and spread of Avian Flu in the country.
Yum! Brands Inc. (NYSE:YUM) had thus been made to face negative publicity due to the safety concerns that surround its products. This was due to the findings that reported high level of antibiotics in locally sourced chicken used by the fast food restaurant chain. On the other hand, the spread of avian flu in the country had also kept consumers from visiting the KFC of Yum! Brands Inc. (NYSE:YUM).
Yum! Brands Inc. (NYSE:YUM) had made sincere attempts to keep up its market share of KFC in China by adding many localized menus to its list including Chili Black Fungus, spicy prawn rice, beef rice and mushroom chicken burger. However, these localized menus had only contributed to the undermining of American identity of Yum! Brands Inc. (NYSE:YUM)’s KFC but had done nothing to attract customers.
This is mainly because the local fast food chains of China prove to be highly competitive at offering such local dishes with better taste and at cheaper prices. On the other hand, customers are highly sophisticated at this time and are not on the lookout for local menus at Yum! Brands Inc. (NYSE:YUM)’s KFC.
The shareholders of Yum! Brands Inc. (NYSE:YUM) are also unhappy over the company’s poor performance for the fiscal year. The shares are now trading at a premium of 38 percent of Standard & Poor’s 500 Index compared to 69 percent premium observed in the last year. However, Yum! Brands Inc. (NYSE:YUM) is determined to ensure its Chinese customers that KFC’s chicken is highly safe to eat through short commercials and marketing campaigns.