Popeyes, KFC aim big with China expansion

The owners of US fried-chicken chains Popeyes and KFC plan to open thousands of new outlets in China, as they see opportunities for growth even though the economy is slowing.

What’s happening  

• Popeyes, owned since March by Tim Hortons China, aims to open 1,700 new outlets over the next decade, expanding from Shanghai, where it plans to open 10 outlets this year and another 70 next year.
• Earlier this month, Yum China, which owns KFC and Pizza Hut, announced it intended to open as many as 1,300 new stores just in 2023.
• Catering and tourism are among the sectors benefiting most from the lifting of Covid-19 restrictions; in Shanghai, for example, spending on hotels and dining out was up 42% year on year in the first half of 2023, while local GDP growth stood at 9.7% over the same period.
• The market is increasingly price conscious, and aggressive promotions by fast-food chains are putting smaller restaurants at risk.

Why China QSR matters

For all the comment about China’s economy, it’s still growing albeit at a slower pace than before. And as Yum China CEO Joey Wat told Reuters, “[market growth] is still much faster, or twice as fast as some developed markets and it is huge. It still offers us amazing growth opportunities." 

Key quote

“China’s catering market is huge, and brands can achieve rapid growth as long as they do their own business well” – Lu Yongchen, CEO of Tim Hortons China.

Sourced from South China Morning Post, Xinhua, Sixth Tone

^{[Image: Popeyes]}