The fried chicken chain’s U.S. business has been sliding for ten years, even as it grew rapidly in Asia. But is has plans for a turnaround, including restaurant renovations and a new ad campaign.
KFC
KFC has had a pretty miserable decade in America. The chain, once the definitive leader in the fast food chicken business, has muddled through ten years of decline at home, even as it rapidly expanded internationally. The food got worse, customers are complaining, the service is shabby, and many restaurants desperately need updating.
But now, KFC is on a mission to reclaim its fried chicken empire with a U.S. turnaround plan that will include store renovations, staff training, and a summer advertising campaign featuring SNL announcer and former cast member Darrell Hammond as Colonel Sanders, white suit, black tie and all.
Parent company Yum Brands—which also owns Pizza Hut and Taco Bell—will invest $185 million over the next three years to help restore the fried chicken chain. CFO Pat Grismer admitted during an earnings call in April that this was "a relatively modest investment" but "it is obviously quite significant to KFC U.S. and we're confident it will unlock significant value in the years to come."
In an exclusive interview with BuzzFeed News, KFC's Chief Marketing Officer for the U.S. Kevin Hochman discussed the need to reinvigorate the brand. "We've had quite a while where we have not grown," said Hochman. He reiterated what struggling restaurant chains often focus on when they need to get back on track: The need to remind consumers about the quality of their food, make sure the service is friendly, and differentiate the brand from competitors.
"Competition has grown and increased," said Darren Tristano, executive vice president of food service research and consulting firm Technomic. "KFC hasn't contemporized to be a better chicken brand." The downward spiral has led to reviews like these.
KFC was recently overtaken by Atlanta-based Chick-fil-A as the largest chicken chain in the U.S. by sales. And it has been steadily closing stores since 2005: by the end of 2014, there were 4,370 remaining locations in the U.S., down from 5,525 in 2004.
As KFC grew rapidly overseas, particularly in China, it lost customers back home to competitors that flaunted nicer restaurants, tastier chicken, and more persuasive marketing. Not to mention that ubiquitous fast food overlord McDonald's, and other burger chains, also sell a lot of crispy chicken sandwiches and nuggets. The average KFC store now makes just under $1 million in annual sales, roughly one-third what the average Chick-fil-A makes, according to QSR magazine. Even as consumers demand healthier food, "there are a ton of fried chicken competitors, and they're all growing," said Hochman.
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