KFC Strips DHL of Some Chicken Deliveries After U.K. Snags
(Bloomberg) -- KFC has stripped parcel service DHL of some U.K. food deliveries, reverting to its former partner after a supply-chain breakdown shut hundreds of restaurants that ran out of chicken.
The fast-food chain, owned by Louisville, Kentucky-based Yum! Brands Inc., handed some of the work back to former supplier Bidvest Logistics, part of South Africa’s Bid Corp., according to a statement Thursday.
KFC overhauled its U.K. chicken distribution chain in November by replacing Bidvest with DHL, a unit of Germany’s Deutsche Post AG that’s better known for deliveries to offices and homes. At the time, the new supplier said it was committed to setting an “industry benchmark” in service.
The new arrangements hit a snag in February when DHL took over the work in partnership with another supply firm, QSL. The switch resulted in hundreds of KFC’s 900-plus U.K. restaurants being shut for several days.
“Our focus remains on ensuring our customers can enjoy our chicken without further disruption,” KFC said in a statement. “The decision has been taken in conjunction with QSL and DHL to revert the distribution contract for up to 350 of our restaurants in the north of the U.K. back to Bidvest Logistics.”
KFC’s supply chain snapped after the German delivery partners shifted from five regional distribution sites run by Bidvest to just one in Rugby, England. At the height of the crisis, analysts at Stifel estimated that the restaurant shutdowns were costing KFC more than $2 million a day in lost sales.
“In conjunction with our partners we remain fully committed to delivering excellent service to KFC‘s remaining 550 restaurants across the U.K.,” DHL said in a statement.
More than 97 percent of the U.K. restaurants are open again, KFC said, though some are still operating with limited menus.
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