Diners not biting on KFC's China revival campaign

Wed Dec 4, 2013 3:45am EST
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By Lisa Baertlein and Adam Jourdan

NEW YORK/SHANGHAI (Reuters) - Yum Brands Inc's (YUM.N: Quote) KFC website in China trumpets the slogan "Trust in every bite".

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 percent 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 on Wednesday 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.   Continued...

KFC's staff wait for customers at its restaurant in Beijing October 9, 2013. REUTERS/Kim Kyung-Hoon