Fast food chains accelerate their paces of expansion
The battle about market share between US fast food chains Kentucky Fried Chicken and McDonald’s has been lasting for a very long time since they appeared in China.
Recently, both the companies announced the plans of expansion and cutting price to attract more customers.
Zhao Li, the company’s general manager, said at the ceremony marking the opening of the 200th KFC restaurant in Beijing that in spite of the economic recession, they will open another 400 new restaurants in 2009 in China.
There have already been 2,300 KFC stores in 450 Chinese cities. This year, they plan to open more new stores than the previous year’s average.
According to McDonald’s China Chief Executive Officer Jaffrey Schwartz several weeks ago in Dongguan, they will add another 175 restaurants this year besides the 1,000 stores in the country.
Due to the economic recession, fast food chains have been more welcomed in the US and Europe as consumers are giving up expensive and fancier restaurants.
However, US-style fast foods are not so cheap as the main stream restaurants especially in the smaller cities.
Lucy Wu, deputy secretary-general from China Chain Store & Franchise Association forecasted that the negative trend would worsen in the first half of 2009.
The economic slowdown lowered the rental for commercial premises, which spurred the new expansion plans of the fast-food chains, said Tian Huilan, researcher, First Capital Securities.
Cutting prices has created room for fast food chains to win more customers.
About one month ago, 1,400 KFC restaurants in 31 cities in China cut the prices of five of their popular set meals by at least 20%. The other restaurants are expected to follow suit soon.
KFC’s Zhao said they are preparing for the promotion programmes this year.
McDonald’s has launched a so-called “preferential programme” in Guangzhou, Shenzhen and Nanjing since last month. Prices of some items are reduced by as much as 28% during lunch hour under the programme.
The programme is planned to be extended to all McDonald’s restaurants in China next year.
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