Pizza Hut 2015 Annual Report Download - page 4

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04
In China we opened 743 new restaurants in 2015. Our disciplined
approach to development balances our continued, strong belief in China’s
long-term growth potential and strong cash paybacks on new restaurants
with current market realities. In 2016 we plan to open 600 more restaurants
in China. This reflects the opportunities we see across our brands
to enter new trade zones and expand our presence in existing ones.
Our net-new unit growth in 2016 will
be similar to 2015 as we expect fewer
closures this year. We expect 2016
to be another year of sequential
operating profit improvement with
growth of 10%.
KFC CHINA
KFC, which represents about 75% of China’s operating profit,
grew same-store sales 6% in the fourth quarter, continuing
the sequential improvement we saw throughout the
year. While same-store sales declined 4% for the year,
total system sales in constant currency were even as
we added 175 net-new units, surpassing the 5,000
unit mark. KFC has more than twice the number of
restaurants of our nearest Western QSR competitor
and is in about five times more cities. This beloved
brand reported restaurant-level margins of 16%, a
full percentage point higher than 2014, despite a
decline in same-store sales. These fundamentals
demonstrate our progress in productivity
initiatives and the tremendous operating
leverage the brand should realize as sales
continue to improve.
We know we still have work to do at KFC and I’m thrilled the
China team is applying global best practices, fresh thinking and
new insights to revitalize the brand and achieve traction with
consumers. Early test results of proven, global, sales-driving
tactics are encouraging and the implementation of these
programs should drive transactions and benefit the division
later this year. One example is box meals, which have proven
successful globally and which we expect to be similarly well
received in China. I can assure you we are taking the right
steps to grow this business – and the momentum we are
seeing makes me confident we will.
743
NEW RESTAURANT
OPENINGS IN 2015
KFC BOX MEAL