How inflation pushed KFC to put chicken feet on the menu in China

Now, “I can report that for this year, for 2022, we are finally selling chicken feet,” yum china (you can) CEO Joey Watt told CNN Business in an interview Monday.

The reason for the change may not be expected by customers: high oil prices.

Watt said the addition was part of a broader effort by the chain to increase efficiency and use more of its ingredients, which has also seen KFC introduce offerings like chicken wings tips to its menu.

Soaring oil and food prices have greatly increased business costs.

“We are trying to absorb this increase in commodity prices … while making full use of the chicken,” Watt said with a laugh. This means using every part of the chicken, “except for the feathers, I think”.

China Yum comes out of what Watt calls the toughest quarter ever. The Shanghai-based company owns the KFC, Pizza Hut and Taco Bell chains in China, where the Covid-19 shutdown recently It affected hundreds of millions, causing many to stay home for weeks on end.

From April to June, Yum China said sales at locations that had been open for at least one year were down 16% compared to the same period a year earlier.

It could have been worse. Although “the second quarter was the most challenging to date,” Watt says, the decline in foot traffic was offset by an increase in demand for deliveries, which was up about 8% in Kentucky and Pizza Hut year-over-year.

However, the company had to adapt. During the second quarter, it backed away from marketing and advertising, asking landlords for rent forgiveness, and urging its restaurants to make the most of what they have.

Despite the headwinds, Watt vowed to avoid layoffs this year.

“We will consider all cost-saving opportunities except for layoffs,” she said. “We have 450,000 employees and 450,000 families that we have to take care of.”

Nestlé has kept prices high this year

Watt said she is determined to maintain a “safety net” for its employees, adding that the company is not preventing stores from opening either.

Earlier this year, Yum China set a goal of opening 1,000 to 1,200 new stores through 2022, and remains committed to that plan.

Unlike other restaurant chains, the company has also refrained from raising meal prices. Instead, she decides to go the other way: trying to attract more customers with better deals.

At Pizza Hut, for example, they recently brought back the buffet, as well as a promotion Discounts for large purchases. “Value for money resonates well with clients under the current circumstances,” Watt told analysts on Friday.

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