Pizza Hut and KFC saw same-store sales decline in China over the last year, with franchisor Yum China stating the brands were impacted by the continued outbreaks in a number of key regions.
Same-store sales fell 9 per cent over the year, and revenue fell 6 per cent from $8.78 billion to $8.26 billion. Restaurant margin, however, grew to 15.1 per cent from 12.4 per cent, largely thanks to lower commodity prices and landlord or government relief.
Adjusted earnings per share declined 19 per cent to $1.53 per share for the year, compared to $1.88 per share.
“2020 was an unprecedented year that tested our people, systems and capabilities,” said Yum China chief executive Joey Wat.
“The Covid-19 pandemic reinforced our determination to look after our employees and strive to be a responsible corporate citizen, an effort that is recognised by our industry.”
According to Wat, same-store sales rebounded in the fourth quarter, but the company expects headwinds has it moves into the start of the new financial year.
Three new outbreaks in January in northern and north-eastern China tightened travel restrictions, and led to recommendations against eating out, which is expected to impact Yum’s trading further.
Despite this, Yum China expects to open around 1,000 new stores in 2021 – after opening 1,165 in 2020.
“We will continue to manage the impact of the pandemic [and] adjust our operations according to market conditions, and drive traffic with compelling offers for both dine-in and off-premise occasions,” Wat said.
“Our confidence in the long-term potential of China is unshaken. We are focused on growing our store footprint and developing our emerging brands.”