Retailing, Franchising, and Consumerism Business Intelligence in China

Yum! Plans To Open 425 Restaurants, Chinese Breakfast Services

According to foreign media sources, Yum!, the owner of KFC and Pizza Hut, is planning its expansion in China, and the group plans to open 425 new chain restaurants in China in 2008 and China is expected to become its largest profit source in the coming ten years.

Yum! plans to launch breakfast services in China this year. These services have been carried out in half of KFC restaurants. In addition, the group will also test 24-hour KFC restaurants and expand distribution services.

David Novak, president of Yum! Restaurants Group, says that his goal is to open more than 20,000 restaurants in China. In 2007, the profit of Yum! Restaurants China was US$375 million, which increased by 30% and contributed more than a quarter of the total profit of the company. Novak predicts that by 2017, the contribution of the China's market will take 40% of the company's total profit, exceeding the U.S. market's 30%.

Just like other foreign companies, Yum! has realized that to seek profit growth, it is not enough to only rely on its brand. The group needs to produce foods that suit the tastes and lifestyles of the Chinese people. Sam Su, president of Yum! Restaurants China, says that the company can not copy foreign models. Facing such a market like China, everyone should strive to develop a new model.

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