KFC owner defies China slowdown with AI menus, robot servers

Bloomberg March 6 | Updated on March 06, 2019 Published on March 06, 2019

American fast food chain KFC’s owner in China is pushing ahead with expansion plans, opening two stores a day in the world’s biggest consumer market and banking on technology to cut costs, even as carmakers and industrial companies signal deteriorating demand.

Yum China Holdings Inc., the nation’s biggest fast-food chain, which operates the KFC and Pizza Hut brands, is launching new restaurants at the second-fastest pace in 30 years and sees potential for over 11,000 more outlets, Chief Executive Officer Joey Wat said in an interview in Shanghai on Tuesday.

While the trade war with the US and the slowest economic growth since 1990 has companies like Caterpillar Inc, Volkswagen AG and Apple Inc warning Chinese consumers are in retreat, Wat remains upbeat on the outlook for fried chicken and pan pizza.

“We believe the runway for growth is very strong, said Wat, a former manager directpr at AS Watson Group UK who has been the CEO of Shanghai-based Yum China for a year. “We are in 1,200 cities in China, which seems like a lot, but there’s another thousand cities in China with no KFC. There’s huge space for growth.”

Yum China’s shares rose 1.6 per cent to $41.60 in New York on Tuesday. They have jumped 24 per cent this year.

Robotic Servers

The KFCs here take payment by facial recognition, ice cream is served by robotic arms and customers can control the background music through their mobile phones like a new-age jukebox.

“As Chinese customers are more sophisticated and diverse, retailers need to focus on the more segmented demand by offering various options,” said Jason Yu, general manager of Shanghai-based Kantar Wordpanel.

Yum’s use of technology to target tech-savvy customers, mainly in top tier cities, is a strategy to lure business in the more mature markets.

Published on March 06, 2019
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