Yum Brands, home to the lovely meat-manglers behind KFC and the occasional (make that frequent) food scandal, is still struggling to stay above water in China. Yesterday the company released an official statement warning investors that “it will take longer than expected for its China restaurant sales to rebound,” or at least until consumers stop worrying and love chemical chicken.
Yum company heads blame a combination of a bad reputation, China’s slowing economy, and the bird flu scare for its lackluster sales, as Reuters reports:
Yum’s sales at established restaurants in China have taken a beating since last December when a social-media fueled food safety scare over chemical residues in chicken from some of its suppliers pummeled sales. That was followed by a bird flu outbreak that destroyed many diners’ appetite for poultry. […]
Yum will launch “an aggressive marketing campaign to fully restore consumer trust in the brand,” spokesman Jonathan Blum told Reuters. He said trust in the KFC brand has improved in China since last December, but that it wasn’t yet fully restored. […]
“We are seeing a slowing consumer spending environment in China,” Edward Jones analyst Jack Russo told Reuters. Yum will “have to continue to run the restaurants really well and get messaging out there that consumers will be fine coming into the restaurants.”
The Chinese market constitutes more than half of Yum’s overall profit, which means that these constant food scandals and atrocious reputation are making someone’s wallet quite a bit thinner.
[Image via Flickr]