Analysis: KFC’s campaign to restore trust may backfire

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br YUM-CHINA-SAFETY

Reuters

KFC staff wait for customers at a restaurant in Beijing. A survey conducted last month found nearly 40 percent of respondents were still concerned about antibiotic use in KFC chickens. Photo: Reuters

New York / Shanghai - KFC’s website in China trumpets the slogan “Trust in every bite”.

That message is part of the company’s new “I Commit” campaign intended to reassure customers in its largest market, who have cut back on visits since Chinese media reported a year ago that a few KFC suppliers used excessive antibiotics.

Interviews with Chinese consumers suggest that rather than soothing concerns, the ads are reminding diners about the food safety scare, which could undermine Yum Brands’ mission to revive sales at its fried chicken chain.

A survey conducted last month found nearly 40 percent of respondents were still concerned about antibiotic use in KFC chickens. Yum Brands, which cut off some suppliers after the television report on antibiotics, initially predicted safety fears would quickly fade. But sales at its established restaurants have yet to turn around, and it has pushed back the recovery timeline.

Yum Brands spokesman Jonathan Blum said that the US-based company had tested the “I Commit” campaign, launched about two weeks ago, and found that it was resonating with consumers.

“It’s reassuring customers of our quality commitment,” Blum said.

There’s a lot at stake for Yum. It is China’s largest Western restaurant operator with around 4 500 KFC outlets and the company reaps more than half of its overall operating profit there.

Ahead of Yum Brands’ annual investor meeting in New York yesterday, analysts said they expected executives would be pressed for details on their plan to reignite KFC sales in China in the face of quality concerns, tougher competition and choppy consumer spending.

Despite a decades-long reputation for serving safe food in China, Yum Brands has struggled to restore diners’ trust in a country where dangerous contamination scandals are commonplace.

Some diners told Reuters that KFC’s ads brought back memories of China national television’s report last December showing that a few poultry farmers supplying the chain fed excessive levels of antibiotics to their chickens. That report helped spawn several months of double-digit percentage declines in sales at established KFC China restaurants.

“This strategy just risks fanning the flames rather than letting people forget about it,” said Yu Kaixin, 24, a recent university graduate from Shanghai, while eating a beef burger at rival McDonald’s, which has also taken a hit from the food safety worries.

The Shanghai Food and Drug Administration investigated the chicken contamination incident. It did not bring a case against Yum China and did not assess a fine.

An online poll of 1 000 Chinese conducted by ConsumerEdge Research during the first three weeks of last month found that safety concerns remained prominent.

About 39 percent of survey respondents “strongly agreed” that they were concerned about antibiotics in KFC chicken, while 33 percent expressed the same concern about bird flu and KFC chicken.

Yum’s sales, which fell sharply in late December last year after the antibiotic residue media report, took another hit from a bird flu outbreak in China in April.

Worries about antibiotics in KFC chicken were strongest among women, low-income diners, people in the 18 to 34 age group, residents of China’s largest cities and people who ate at KFC in the month before the survey. – Reuters


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