The reporter learned from KFC China today that the company launched a price adjustment on December 24th, with an average increase of 2%, and the specific adjustment range ranges from 0.5 yuan to 2 yuan.
This is the first price adjustment in the past two years, aimed at better adapting to changes in market costs and ensuring the sustained, stable, and healthy development of the enterprise, "said the person in charge of KFC China to reporters.
It is reported that KFC China will regularly evaluate and cautiously adjust its price structure in conjunction with changes in operating costs. However, KFC's popular discount packages in China, such as the "Crazy Four" special offer, "Crazy Day" promotion, "OK meal" and "Children's meal", will not participate in this price adjustment and will remain at the original price.
Stimulated by this news, today, the stock price of Yum! Brands China, the listed entity of KFC China, surged. As of 11:00 am, Yum! Brands China reported HKD 381.40 per share, up 2.25%.
KFC, abbreviated as KFC, is one of the multinational chain restaurants in the United States and the world's largest fried chicken chain enterprise. In 1987, KFC opened China's first restaurant in Qianmen, Beijing. After more than 30 years of deep cultivation, it has become one of the popular catering brands among Chinese consumers.
According to the recently released third quarter 2024 performance report by Yum! China, the company achieved a total revenue of 3.07 billion US dollars in the third quarter, a year-on-year increase of 5%, which is the highest quarter in history; Achieve a core operating profit of 369 million US dollars, a year-on-year increase of 18%.
As of September 30, 2024, Yum! Brands China has a total of 15861 stores, including 11283 KFC stores.
Against the backdrop of declining consumption, KFC China has accelerated its store expansion in recent years. On December 15, 2023, the opening of KFC's Beijing Hangzhou Grand Canal restaurant marked the official breakthrough of KFC's China store scale, surpassing 10000. At the opening ceremony, Qu Cuirong, CEO of Yum! Brands China, stated that the company expects to reach over 700 million Chinese consumers with KFC's cuisine and services by 2026, achieving a growth of over 50% in the customer base.
In addition to achieving significant results in store expansion, KFC China has also keenly observed changes in consumer trends and closely followed the trend of cost-effective consumption. It has launched marketing activities such as "Crazy Thursday" and "Crazy Sunday", which have been highly successful.
In August 2023, the relevant person in charge of Yum! Brands China stated in a media interview that "Crazy Thursday" is still very popular at KFC, driving sales on Thursday to be 50% higher than other business hours, and "Crazy Sunday" also boosted sales on Sundays.
It should be pointed out that a series of promotional activities have also lowered the average customer price of KFC. According to Yum China's Q3 2024 financial report, the average unit price of KFC decreased by 3% year-on-year to 38 yuan. The management of Yum! Brands China pointed out during the performance conference call that KFC is expanding its price range and further reducing the average selling price. However, in the short and long term, Yum China's pricing for KFC will tend to stabilize in the future.
This KFC China price increase is not an isolated case. Starting from December 16, 2024, Meixue Ice City will add 1 yuan (including ordering through mini programs/apps) to the retail price of locally adjusted drinks (including ice cream series) in some stores located in Beijing, Guangzhou, and Shenzhen. The prices for takeout and group purchases will remain unchanged. The official customer service of Meixue Ice City stated that the price adjustment is a comprehensive consideration of market factors and store operations, and has been uniformly adjusted for individual regional products.
The industry believes that with the continuous boost of domestic demand, catering consumption is expected to accelerate its recovery. According to a research report by Huachuang Securities, offline services are expected to become a highlight of consumption in 2025. The Politburo meeting has explicitly stated the need to "vigorously boost consumption", and catering, as the core industry of service consumption with a market capacity of nearly 5 trillion yuan, is one of the important driving forces for exerting multiplier effects and driving consumption improvement. The subsequent policy support is expected to increase, and it is expected to gradually stabilize and repair in the coming year under a low base.