KFC and Pizza Hut in China were slow to adapt to food delivery

Crayfish burgers, lotus leaf-wrapped rice and chicken burgers topped with kimchi are among the offerings that have helped Yum China boost sales at its KFC and Pizza Hut outlets in the country after years of lacklustre growth. Yum China, which operates more than 8,600 restaurants, said… that its revenue in the first quarter increased 4 per cent from the same period last year to $2.3 billion…  The quarter followed a difficult few years in which revenue growth has been driven mainly by new openings… Analysts said the company was slow to adapt to growth in food delivery, while consumers began to see its brands as stale. Same-store sales at Pizza Hut rose 1 per cent for the first quarter of this year, following last year’s decline, after the company changed three-quarters of menu items… New York-listed shares of Yum China, which was spun out of its US parent company in 2016, performed poorly last year but have risen by a third since January. The company has hired about 50,000 couriers, and deliveries now account for nearly 20 per cent of its sales… Nearly 90 per cent of KFC orders are paid for digitally, up from 18 per cent in 2016… The company’s shares rose more than 4 per cent as its same-store sales growth beat estimates… The company plans to add duck meat to its menu and increase its seafood offerings this year.
Tom Hancock