Most Chinese Remain Skeptical About KFC In China
Rubi Valdez | | Oct 09, 2014 12:10 PM EDT |
(Photo : Reuters/Carlos Barria) A customer walks out of a KFC store in downtown Shanghai July 31, 2014. A food safety scare in China is testing local consumers' loyalty to foreign fast-food brands, including McDonald's Corp and Yum Brands Inc, which owns the KFC and Pizza Hut chains.
Chinese consumers are still skeptical about KFC products sold across China following an incident of improper food handling that sparked the biggest scandal in this chain of fast food restaurants.
Based on the third quarter earnings report of Yum Brands, the umbrella company behind Taco Bell, Pizza Hut, and KFC, the said incident has greatly impacted Chinese customer confidence towards KFC.
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From a 15 percent growth in the second quarter, Yum's revenue plummeted to 14 percent even before the company hit its fiscal target. Yum Brands CEO David Novak acknowledged that the issue could go as long as six to nine months but insisted to investors that the company is already on its path to recovery.
Novak said that Yum already has damage control in place such as commercials on food quality assurance, tightening requirements for suppliers, and encouraging employees to be their forefront safety advocates.
Back in July, a controversial blow hit KFC involving suppliers who sold expired meats to branches. Shanghai Husi Food Co, who also supplies meat to McDonald's, was dragged in a TV report showing reused meat that has fallen on the factory floor as well as mixing fresh and day old meat.
Chinese food inspectors immediately seized Husi's business permit while the other two commercial food chains made a public apology. But the crowd finds it hard to restore their trust especially that KFC has largely been a part of most of Chinese people's daily lives.
KFC has taken advantage of China's lucrative consumer market bringing in sales faster than any other competitors. Yum also envisions itself to expand its empire to 20,000 food chains by 2020.
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