The Malaysian Insider :: Food
The Malaysian Insider :: Food |
| Diners not biting on KFC’s China revival campaign Posted: 03 Dec 2013 10:56 PM PST That message is part of the company's new "I Commit" campaign intended to reassure customers in its largest market, who have cut back on visits since Chinese media reports a year ago about excessive antibiotic use by a few KFC suppliers. Interviews with Chinese consumers suggest that rather than soothing concerns, the ads are reminding diners about the food safety scare at the fried chicken chain, which could undermine Yum's mission to revive sales there. A survey conducted in November found nearly 40% of respondents were still very concerned about antibiotic use in KFC chickens. Yum, which cut off some of its suppliers after the television report on antibiotics, initially predicted safety fears would quickly fade. But sales at its established restaurants have yet to turn around, and it has pushed back the recovery timeline. Yum spokesman Jonathan Blum said the company had tested the "I Commit" campaign, launched about two weeks ago, and found that it was resonating with consumers. "It's reassuring customers of our quality commitment," Blum said. There's a lot at stake for Yum. It is China's largest Western restaurant operator with roughly 4,500 KFC outlets and the company reaps more than half of its overall operating profit there. Yum is hosting its annual investor meeting in New York later today and analysts expect executives will be pressed for details on their plan to reignite KFC sales in China in the face of quality concerns, tougher competition and choppy consumer spending. Despite a decades-long reputation for serving safe food in China, Yum has struggled to restore diners' trust in a country where dangerous contamination scandals are commonplace. Some diners told Reuters that Yum's ads bring back memories of China national television's December 2012 report showing that a few poultry farmers supplying Yum fed excessive levels of antibiotics to their chickens. That report helped spawn several months of double-digit percentage declines in sales at established KFC China restaurants. "This strategy just risks fanning the flames rather than letting people forget about it," said Yu Kaixin, 24, a recent university graduate from Shanghai, while eating a beef burger at McDonald's, which has also taken a hit from the food safety worries. The Shanghai Food and Drug Administration investigated the chicken contamination incident. It did not bring a case against Yum China and did not assess a fine. The restaurant operator quickly responded by cutting poor performers from its poultry supplier network. Its "I Commit" public relations push features KFC workers, including KFC China Chief Executive Sam Su, who said the chicken in China is the same as what's served at its restaurants around the world. The message is not having the desired effect on Ao Kun, 25, an investment manager from Jiangxi Province. The more KFC promotes its food quality, "the more I go off them," he said while eating a hamburger combo meal at Burger King. "They keep harking on about it again and again. It's not their competitors that are beating them, it's themselves." An online poll of 1,000 Chinese conducted by ConsumerEdge Research during the first three weeks of November found that safety concerns remained prominent. About 39% of survey respondents "strongly agreed" that they were concerned about antibiotics in KFC chicken, while 33% said the same about bird flu and KFC chicken. Yum's sales, which fell sharply in late December 2012 after the antibiotic residue media report, took another hit from a bird flu outbreak in China in April. Worries about antibiotics in KFC chicken were strongest among women, low-income diners, people in the 18-to-34 age group, residents of China's largest cities and people who ate at KFC in the month before the survey. "This antibiotic thing is really being stubborn," said Peter Reidhead, the ConsumerEdge analyst who runs the China survey. Yum on Monday said sales at established KFC restaurants in China were flat for the month of November. But a closer look at the results suggested that KFC continues to struggle. A limited-time half-price offer on buckets of KFC chicken fueled a 16% increase in same-restaurant sales for the first 10 days of November. But once the promotion expired, sales were down about 8% for the remainder of the month. KFC China is not repeating the special in December. - Reuters, December 4, 2013. |
| Pay-what-you-like restaurant in China loses thousands Posted: 03 Dec 2013 10:52 PM PST The "Five Loaves and Two Fish" restaurant, named for the story of Jesus feeding the five thousand, has been serving up hot meals and coffee daily to a packed house in Fuzhou since it opened its doors in August. The city centre eatery is open 24 hours a day and is known for its seafood and local Fujianese cuisine, with specialities including garlic scallops, beef with scallions, and pickled pork. Diners are expected to wash their own dishes after eating and then put whatever money they want to pay into a box. But according to its investors, as many as one fifth of patrons opt to pay nothing, and the restaurant has lost 250,000 yuan (RM132,069.25) since it opened. "We initially expected the restaurant to stay open for two months, and now it has lasted three. The losses are not unbearable," owner Liu Pengfei, 50, told the state-run China Daily newspaper. Liu said in an October television interview that "what we care about most is not money, but trust" — but he now plans to encourage patrons who have not been paying to explain their reasons why not. "They can tell me they don't have enough money, that's fine. But paying nothing and saying nothing is totally different," he told the paper. "Honesty is the first step to building trust. In my eyes, those who don't pay are sick." - AFP, December 4, 2013. |
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