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Yum! Brands announces fourth-quarter earnings

Rob Schmitz Feb 6, 2012

Jeremy Hobson:We’ll get a quarterly earnings report today from Yum! Brands. That’s the company that owns KFC, Taco Bell and Pizza Hut. It’s easy to find one of those restaurants in the United States where there are 20,000 of them. Same goes for China, where Yum has 4,000 restaurants.

Marketplace’s Rob Schmitz reports from Shanghai.

Rob Schmitz: Yum! Brands opens one restaurant every 18 hours in China. It plans to continue that growth in 2012, despite fears that China’s economic growth may sputter a little.

James McGregor: They have a bet on China urbanization.

James McGregor is a senior counselor at APCO Worldwide in Beijing. He says the parent company of KFC is looking beyond a slip in economic growth to China’s rapidly changing demographics.

McGregor: Is China going to urbanize more and more? Of course it’s going to. We’re talking about 20, 25 million people supposed to move to the cities every year, and this is a middle class meal.

But there are more fast food chains offering that middle class meal than ever in China. That’s why Yum has maintained an aggressive strategy. A couple of months ago, it took over Little Sheep, one of China’s largest hot pot restaurant chains. McGregor says there’s no doubt that more competition will decrease Yum’s market share in China, but he says the company’s profits will continue to grow.
In Shanghai, I’m Rob Schmitz, for Marketplace.

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