KFC China operator Yum to continue opening spree, value-menu push
The fast-food company revealed its plans while reporting that 2024 sales increased 5 per cent from a year earlier to US$11.3 billion, which was in line with market expectations.
'There are still a lot of opportunities for us to open stores both in top-tier and lower-tier cities,' CEO Joey Wat said during a briefing on Thursday. Yum China would focus on smaller Chinese cities with 'lower investment, smaller menus and a simpler operating model', she added. The strategy comes as mainland consumers , spooked by China's lingering deflation , have been tightening their purse strings over the past two years and are expecting darker days ahead amid the prospect of a trade war with the US following the return of President Donald Trump to the White House.
About half of Yum's budgeted capital expenditure of US$700 million to US$800 million for this year would be used for new store openings, it said.
'The company's focus on value for money is unchanged, supported by various promotions,' Deutsche Bank analyst Han Zhang said in a research note. Yum was reluctant to provide guidance for same-store sales growth in 2025 given that consumer spending might turn cautious amid 'macroeconomic uncertainties', he added.
In its guidance for net new store openings, Yum said a total 1,600 to 1,800 outlets would be added in 2025, compared with 1,751 last year. In the fourth quarter of 2024, it opened 534 new stores.
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