Sales

KFC sales in UK down 9% after restaurants shut by delivery saga

by XPRESS, 03 May 2018

Executives have also warned lingering concerns at KFC UK would contribute to the current quarter likely being “the worst” of the year.

Globally, KFC like-for-like sales increased 2% but bosses said it would have been 3% had it not been for the delivery issues in the UK, where it has 871 restaurants.

The UK accounts for 6% of KFC’s system sales worldwide.

Yum! Brands was forced to shut about 750 British outlets in February after a switch to supplier DHL led to shortages.

The restaurants have mostly resumed operations with KFC switching back to previous supplier Bidvest for 350 restaurants in the north.

Meanwhile, Pizza Hut system sales in Europe, including the UK, were up 3% – the continent accounts for 10% of Pizza Hut’s system sales globally.

Individual figures for the UK were not included in the announcement.

Globally, KFC like-for-like sales increased 2%, with US like-for-like sales flat – system sales worldwide increased 6%.

Operating profit increased 5.3%, driven by refranchising and like-for-like sales growth, partially offset by the gross up of advertising fund revenues and offsetting expenses required by the revenue recognition accounting standard.

KFC opened 262 international restaurants in 42 countries during the period.

Pizza Hut sales were up 2% globally, with like-for-likes up 1%. US system sales, which account for 46% of global sales, were up 2%.

Pizza Hut opened 148 international restaurants in 39 countries during the period.

Operating margin fell 0.6% driven by the gross up of advertising fund revenues and offsetting expenses required by the revenue recognition accounting standard, partially offset by refranchising.

Operating profit was up 6% to $88m. Taco Bell like-for-like sales increased 1% and system sales were up 4%. Operating profit fell 6% to $132m.

Taco Bell opened 56 restaurants during the period, including 11 international sites. Yum! Brands’ total revenue in the quarter increased 8% to $251m.

It refranchised 144 restaurants – 52 KFC, 43 Pizza Hut and 49 Taco Bell sites – for pre-tax proceeds of $205m. At the end of the quarter, Yum! Brands’ global franchise ownership mix remained at 97%.

 

Article credit: Propel info