Pizza Hut 2013 Annual Report Download - page 5

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MANAGEMENT
RECRUITS
KFCs IN OVER 900
CITIES IN CHINA
Let me now address KFC China, which was obviously our biggest
challenge last year. Specifically, we are in the process of overcoming two
issues that significantly impacted KFC sales in 2013: negative publicity
from the poultry supply incident in late December 2012 and subsequent
news of Avian Flu. Here are some of the major actions we took in 2013 to
strengthen our KFC business in China.
First, in an effort to build and reinforce positive consumer perceptions
around the safety of our food, our ongoing “Operation Thunder”
initiatives strengthened our poultry supply chain. I assure you, we are
always in the process of improving our supply chain. We also introduced
a powerful quality assurance campaign called “I Commit.”
While we experienced significant sales deleverage at KFC, the China
team deserves a lot of credit for doing an excellent job managing
costs. We sharpened our ability in the areas of sales forecasting, labor
scheduling and how best to optimize service levels with fewer labor
hours. This capability will help us drive profitability going forward.
Now, as I’ve always said, the bedrock of our success in China has been
our outstanding restaurant operations, which are getting stronger and
stronger. In 2013, we hired over 8,000 new management recruits into
our Whampoa Management Training Academy because we’ll be opening
thousands of new restaurants in the years ahead. Nearly 100% of our
restaurant managers have a college degree, and about 50% of our
restaurant team members are university students.
With world-class operations as our foundation, we opened 428 new
KFCs this past year and now have almost 4,600 KFCs in over 900 cities
in China…that’s more than twice the size of our nearest competitor.
KFC also has the largest home delivery business in China, with 70% of
our orders being placed online. As a testament to our success, we were
named the #1 foreign brand in China in a 2013 report published by the
BBC. There’s no doubt KFC has been, and continues to be, a power brand.
4,600
CHINA
NEW
As a result, we are happy to see significant
progress in rebuilding trust at KFC, with our
key brand attribute scores now nearly back
to where they were in 2012.
*2013 Report published by the BBC.
8,000
3
D