America’s largest chicken chain to expand its footprint
America’s largest fried chicken chain has taken over the world with thousands of international locations, but its national presence has been steadily declining for years. However, that is all about to change as KFC announces growth plans in the United States for the first time in nearly two decades.
We tend to think of the business as one of the staples of American fast food, but did you know that there are currently more KFC restaurants in China than in the United States? Estimates place KFC’s Chinese footprint to just over 6000 units, approximately 2,000 more locations than currently in the United States.
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In fact, KFC’s global footprint surpassed its national footprint some time ago. By 2005, its international reach had surpassed that of the country by around 2,600 stores. In 2021, that difference has grown to an incredible 17,000 units, according to Catering company, the chain currently operates 21,000 international locations, but fewer than 4,000 national stores.
But KFC is looking to lead well, according to a recent statement from President Kevin Hochman. Speak to shareholders during a virtual Investor Day Event, he announced that the company is expected to become a “new net positive unit” by the end of 2021, with new restaurant openings exceeding planned closures for the first time in 17 years.
Positive unit growth in the United States is great news for KFC. Chicken experts have recorded around 100 more store closings than openings each year since 2004. In 2017, the chain managed to cut that rate by almost half and reverse the trend in 2018. While 2020 was supposed to be their big comeback year, closures linked to the pandemic thwarted those plans. But now, with “the largest pipeline of new construction sites in more than a decade” – including new drive-thru-focused stores – KFC is poised to break through the threshold of unit growth.
The imprint is just a battle in a war the channel is currently waging Chick-fil-A, its main American competitor. While KFC still has around 1,400 more stores than the much smaller Chick-fil-A, it lost its business advantage to the competitor in 2013. Chick-fil-A again overtook the Colonel in 2018, the store performance doubling that of KFC. Even Popeyes gave the channel a run for its money and, as of 2021, claims almost equal market share.
All three chains have benefited in recent years from the growing popularity of chicken sandwiches. Popeyes is generally credited with starting the trend, but fast food outlets across the board have benefited. KFC launched its own version earlier this year and has since enjoyed increased same-store sales.
In terms of reclaiming its position in the US industry from Chick-fil-A, KFC still has a long way to go. While expanding overseas in the 2000s, it allowed a former regional channel like Chick-fil-A to become, surprisingly, the third-largest restaurant chain in the United States by sales. Perhaps the new and improved Chicken Sandwich, which currently accounts for 10% of all KFC sales, will help.
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