By Laurie Burkitt
U.S. restaurant chain Yum Brands Inc. launched a new menu and
marketing campaign in China on Thursday, aiming to regain customer
confidence after reported overuse of antibiotics by some of its
chicken suppliers created a backlash.
The Louisville, Ky., company is rolling out new menu items,
including two new chicken sandwiches, three rice dishes as well as
drinks and desserts for its China-based KFC outlets, according to a
statement from the company.
KFC is also tapping Chinese celebrities to promote its new
products, the statement said. And, it said, an online campaign for
its chicken products is already under way.
China is a critical market for Yum. The company operates more
than 6,200 KFC, Pizza Hut, East Dawning and Little Sheep
restaurants in China, and plans to open 700 more this year. But Yum
has faced challenges over the past year because of public
perceptions about the quality of KFC's products. A probe by
Shanghai food safety regulators in late 2012 that found excessive
levels of antibiotics in chicken from two KFC suppliers led to
negative publicity that in part caused sales to tumble last
year.
Beyond that, analysts say competition is building for KFC and
other Yum-owned outlets in China, as local and international rivals
have expanded across China. KFC was one of the first Western
fast-food chains to expand across China.
Yum reported a profit of $321 million in its most recent
quarter, ended Dec. 28, down from $337 million a year earlier.
Sales at China outlets open more than 12 months declined 4% in the
fourth quarter.
The addition of so many new products to the menu is
unprecedented in KFC's 27-year history in China, said Sam Su, Yum's
China chief executive, in the statement. The company plans to
update KFC's menu at least once a year in the future, Mr. Su
said.
The company will also freshen up its branding with new
packaging, employee uniforms and store designs, the statement said,
adding that there will also be new mobile applications, an
electronic menu and prepay takeout options. The company's
spokeswoman didn't respond to requests for more information.
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