Yum China, Reliant on Delivery, Says Regional Recovery Uneven
(Bloomberg) -- Chinese diners are returning to restaurants, though not quite as quickly as Yum China Holdings Inc. had hoped.
The owner of KFC and Pizza Hut in China, which reported mixed results on Tuesday in New York, said a full recovery to pre-coronavirus levels will “take time,” with the comeback likely to be uneven and non-linear. The restaurant operator cited limited consumer travel and renewed caution after recent outbreaks in Yunnan province as two factors limiting gains.
“While we are pleased with the first quarter performance, sales were impacted by regional outbreaks and significantly reduced travel volumes,” Chief Financial Officer Andy Yeung said in a statement. “In the short term, the top priority of our business is to drive consumer traffic back to our stores,” including through more spending on marketing.
Comparable sales at KFC missed estimates while Pizza Hut surpassed them. Meanwhile, delivery, which accounted for about 29% of the company’s sales, is playing an increasingly important role for restaurants as the world tries to tackle the pandemic. The company saw about 84% of orders coming from digital channels, which include delivery, mobile orders and kiosk orders.
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