Yum China's same-store CNY sales down almost half amidst COVID-19 outbreak
The restaurant operator has also introduced contactless delivery services amidst slumping dine-in traffic.
Yum China claimed that its same-store sales from stores trading during the Chinese New Year period in China went down 40 to 50% amidst the novel coronavirus outbreak, expecting operating loss in Q1 2020.
The sales plunge was due to shortened operating hours and reduced traffic, amongst factors related to the outbreak. The restaurant operator has since shut over 30% of its nearly 9,000 stores in the mainland.
"We have implemented various preventative [sic] measures across our restaurants and other workplaces to help protect our employees and customers. We will continue to monitor this fluid situation and respond accordingly,” Yum China CEO Joey Wat said about the recent outbreak of the novel-coronavirus in a recent earnings report.
"[W]hile it is difficult to fully ascertain the expected impact of the coronavirus outbreak at this time, we can reasonably expect it to materially affect our 2020 sales and profits,” Yum China CFO Andy Yeung added.
The company, which operates KFC and Pizza Hut in China, cannot forecast when the closed stores will reopen. Last year, it opened over a thousand new stores.
Recently, Yum China has posted a 8% system sales increase year-on-year in Q4 2019, with the chicken brand contributing 10%. In full year, system sales grew 9% over the past year.
Moreover, it has also reported a 6% revenue jump to US$2.03 billion in Q4 2019 compared to US$1.91 billion in the preceding year. In full year, it has seen a 4% revenue rise year-on-year to US$8.78 billion from US$8.42 billion.
For 2020, the company eyes to open 800 to 850 new stores, with capital expenditures between US$500 million and US$550 million.
Contactless delivery
Considering the coronavirus outbreak, the company has launched contactless delivery services amidst slumping dine-in traffic, CBS has reported.
In Q4 last year, delivery added 23% to the company’s sales. Brands under the company caters to 1,249 cities in China.
Moreover, digital orders, including delivery, mobile orders and kiosk orders, accounted for 61% of its sales in the same period, up 17 points year over the year.
