Yum! Brands suffering from Chinese food scandals | RetailDetail

Yum! Brands suffering from Chinese food scandals

Yum! Brands suffering from Chinese food scandals

Yum Brands! – parent company of Pizza Hut, Taco Bell and KFC – is suffering from the food scandals in China. The discovery that some competing restaurants made Chinese fondue from recycled leftovers of earlier customers and the fact that lso-called lamb meat contained meat from chickens, ducks, rats and dogs, are causing troubles at other companies from the sector as well.

Fraud at competitors

The American restaurant group Yum Brands! bought Little Sheep, the biggest chain for hotpot (Chinese fondue), in 2011. However, the takeover cannot be called a success so far: sales and profit contribution dropped last year and the first quarter of 2013 did not show any signs of improvement.

 

In a conference with analysts CEO David Novak admitted Yum Brands! is suffering from the several Chinese food scandals. Despite the fact the chain buys its lamb at two verified suppliers and that there have been no indications of fraud, the market leader in hotpot is still suffering from the commotion when it was discovered some suppliers mixed meat from rats, chickens, ducks and dogs in their lamb. At least 11 tons of that meat was sold to chains such as Dai Mei, Tan and Macao Doulao.

 

Higher prices also unsuccessful

There is a second reason why Little Sheep is not faring well: Yum Brands! increased the price of the chain from 70 to 90 yuan (from 9 to 11 euro), in an attempt to change the image of the chain, towards a higher segment of the market.

 

Not only Little Sheep is having troubles, KFC is also having its issues. The chain was accused of administering antibiotics to chickens to increase their growth. The bird flu also hasn’t helped, causing sales to drop by a quarter to a third in the past few months.

Questions or comments? Please feel free to contact the editors


Isabel Marant opens first Dutch store

24/05/2018

Fashion brand Isabel Marant opened its very first Dutch boutique in Amsterdam. It is located in the P.C. Hooftstraat, in a former McGregor store.

Zara opens new flagship store with holograms and robots

18/05/2018

Zara’s remodeled flagship store in Stratford (London) welcomes customers with holograms, robot arms and iPad-powered employees. The store wants to unite the best of both the online and offline shopping world.

Komono wants to reach 10 physical stores this year

17/05/2018

Belgian accessory label Komono wants to double its number of physical stores to ten this year. “The stores are important to tell our story”, Anton Janssens and Raf Maes told De Standaard.

Hema has to pay Levi's millions

17/05/2018

Store chain Hema needs to pay a 4.4 million euro fine to jeans brand Levi’s after the latter went to court because Hema applied its V-shaped stitching to its own collection.

Suitsupply suffers losses because of expansion

15/05/2018

Dutch Suitsupply has experienced a decent turnover growth last year, but its net result tumbled below zero because of its huge investments. Nevertheless, that is the only way forward according to its founder, whose focus is still fixed on the United States.

Starting this Friday, Belgium has its own national e-commerce event

15/05/2018

Move over, Black Friday! This week, Belgium launches its own national e-commerce event as Jack & Jones, Kiabi, La Redoute, Sarenza, Tape à l'Oeil and Veritas organise the first Belgian Friday.