On December 24th, Blue Whale News reported that after two years, KFC China announced a price adjustment.
On December 24th, Blue Whale News learned from KFC that they have initiated a price adjustment, marking the brand's first product price adjustment in nearly two years. It is reported that the average increase in this price adjustment is 2%, with a specific adjustment range of 0.5 yuan to 2 yuan. KFC stated that the price adjustment aims to better adapt to changes in market costs and ensure the sustained, stable, and healthy development of the enterprise.
The relevant person in charge of KFC China stated that in combination with changes in operating costs, the company will regularly evaluate and carefully adjust its price structure. KFC's popular discount packages, such as the "Crazy Four" promotion, "Crazy Day" activity, "OK meal" and "Children's meal", will maintain their original prices unchanged.
KFC's price increase should be considered a last resort, "said Zhu Danpeng, a Chinese food industry analyst, in an interview with Blue Whale News." After 2023, the cost of the entire supply chain will rise, and the cost of personnel wages will also rise. Overall, the price increase is in line with the actual market situation.
However, the key issue now is consumers' ultimate pursuit of cost-effectiveness, so this price increase should still have an impact on KFC's overall sales, "Zhu Danpeng further pointed out.
KFC entered mainland China in 1987 and its operator in China is Yum China. Yum! China's financial report shows that as of September 30, 2024, the total number of stores in China is 15900, including more than 11000 KFC stores and more than 3600 Pizzahut stores.
In terms of performance, Yum! China's third quarter revenue was $3.07 billion, a year-on-year increase of 5%, making it the best quarter in history; Operating profit of 371 million US dollars, a year-on-year increase of 15%; The core operating profit margin increased by 18% year-on-year. Financial reports show that KFC and Pizzahut have more than 510 million members in total.
Specifically regarding the situation of KFC restaurants, financial report data shows that in the third quarter of this year, KFC's revenue was 2.31 billion US dollars, with a 1% increase in order volume and a 6% increase in sales revenue. The company stated that this was mainly due to the contribution of 8% net new stores in this quarter.
It is worth mentioning that in the third quarter, KFC's unit price and same store sales both showed a slight decline, with a 3% year-on-year decrease in unit price and a 2% year-on-year decrease in same store sales. Industry insiders pointed out that KFC's price increase this time is aimed at improving the same store sales of restaurants.