Yum tests upscale restaurant in Shanghai - Ben Cavender

Ben Cavender

You might know Yum mostly from KFC and Pizzahut, but in China it has started to test the upscale market. Retail analyst Ben Cavender looks at a test-kitchen at Shanghai´s Bund. From Reuters.

Reuters:

Overlooking Shanghai's iconic riverside Bund and rubbing shoulders with the city's most expensive venues, the restaurant is what Yum calls a "lab" where it studies Chinese diners as it looks to bounce back from a lengthy slump in its top market. 

"A high-end test kitchen will let Yum test the waters with new menus and concepts and get feedback from more sophisticated diners - helpful if you want to go a bit upmarket," said Ben Cavender, principal at China Market Research Group. 

Yum's same-store sales at its nearly 7,000 restaurants in China, the firm's biggest market for revenue and profit, fell 16 percent in the last quarter of 2014, dragged down by back-to-back food scares, rising local competition and a sense its main KFC brand may have fallen out of touch with China's consumers.

More at Reuters.

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The KFC, McDonald's shoot-out - Ben Cavender

Ben Cavender

Both KFC and McDonald's have been struggling to keep market share in China by expanding fast. Localizing has become a key word,  but sometimes at the expense of quality, says business analyst Ben Cavender in AdAge.

AdAge:

The U.S. giants have also faced headwinds from questions over their chicken supply, avian flu fears and a slowdown in economic growth. McDonald's China comparable store sales were down 3.6 % in 2013 from 2012. KFC is also revamping its China offering, with an updated menu and much-needed store renovations.

"One of the problems KFC had is they've expanded so quickly they haven't done a good job of cleaning up and modernizing stores, whereas McDonald's has been very aggressive about doing that," said Ben Cavender, principal at China Market Research Group. "We're starting to see a shift where consumers are saying they actually like the McDonald's dining experience, more than at KFC."

McDonald's is also getting more aggressive about store openings: Last year it debuted 275 China locations and this year it plans 300.

More in AdAge.

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