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KFC launches China campaign to rebuild brand

Published on NewsOK Modified: February 25, 2013 at 3:26 pm •  Published: February 25, 2013
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CEO David Novak has said the company would need the "gift of time" for the controversy to die down. KFC has declined to say when it expects the business to fully recover.

The stakes are high for Yum. Even before the chicken scare, sales growth in China was slowing and fell into negative territory in October.

Executives blamed slower Chinese economic growth and the comparison with earlier explosive expansion. But KFC and other Western fast food chains also face mounting competition from young but ambitious Chinese rivals.

The locals started out copying global brands but are developing their own identity and the elusive skills to manage chains of hundreds of outlets and networks of far-flung suppliers.

One chain, Yonghe Dawang, copied KFC's Colonel Sanders logo so closely with its image of a smiling, grandfatherly Chinese man that Western tourists did a double-take at its restaurants.

More recently, Yonghe Dawang has developed its own image and switched to a logo of a noodle bowl. Since being acquired by Jollibee Foods Corp., a Philippine fast food upstart that has expanded throughout Southeast Asia, Yonghe Dawang has expanded to 307 restaurants.

Zhen Gong Fu, which sells bowls of rice with beef, pork and other meat, has 479 restaurants nationwide. Other competitors include Master Kong Chef's Table, with 100 outlets in 30 cities.

Executives note that Yum has bounced back from other troubles, such as an avian flu scare in 2005 that dragged down sales by as much as 40 percent.

The company says it plans to maintain its rapid pace of new restaurant openings in China.

Another 700 new sites are planned for this year, with Yum focusing more on cities outside Beijing, Shanghai, Guangzhou and Shenzhen where it sees greater potential for growth.

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AP Business Writer Candice Choi in New York City and AP researchers Flora Ji in Beijing and Fu Ting in Shanghai contributed.