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Yum! Brands to continue Chinese expansion amidst chicken scandal

RBR Staff Writer Published 26 July 2013

Yum! Brands, an American restaurant franchisee, is going ahead with its plans of opening 700 KFC fast food outlets in China undeterred by food safety scandal.

Yum! operates or licenses Taco Bell, KFC, Pizza Hut and WingStreet restaurants worldwide.

The restaurant operator reported decline in Chinese sales duing the second quarter of 2012 due to bird flu outbreak. Same store sales in the country fell by 20% during the period, which included a 26% decline at KFC.

Later in 2012, Shanghai's food regulation authorities stated that eight batches of chicken supplied to KFC by Liuhe Group contained antibiotics in harmful levels, following which Yum! stopped all supplies from Liuhe.

Yum! China chairman and chief executive officer Sam Su told ChinaDaily that the company has made no changes in its plans of 700 eatery launches during the year.

"Business in China has been picking up gradually," Su added optimistically and added that the sales would turnaround as the retailer has set food safety as a top priority.

In February 2013, Yum! Brands has introduced quality-assurance measures including terminations of uncertified poultry producers; improving supply chain; and enhancing customer interaction to shore up flagging sales.

"We have struck off 4,700 unqualified chicken houses and three poultry suppliers since February this year. The new measures will become long-term standards," Su concluded.