Analysts said customers in China have been slow to forget recent food scandals, one of which involved a major supplier of meat to fast-food companies including McDonald's and Yum, which was shut down for allegedly violating numerous safety regulations, including mixing in chicken and beef parts that were well beyond their expiration date.
Yum has launched several initiatives to attract more customers in China including a high-end restaurant Atto Primo in Shanghai, and providing quality coffee in 1,300 restaurants across 10 cities.
Ben Cavender, principal of the Shanghai-based China Market Research, said he expected both brands to continue to struggle in China and internationally. "This is due to changing consumer tastes and an overall shift toward either more healthy foods or niche brands," said Cavender.
He said in China specifically both brands continue to feel the effects of the scandal, and a slowing economy, and any company running a huge number of stores might be faced with having to close some.
"Coffee sales may be boosting KFC a little bit," he said, "but I don't think they have it fully implemented yet and they also have a lot of competition in that space."More in the China Daily.
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