Yum China Holdings, the operator of KFC and Pizza Hut in mainland China, is set to continue its expansion efforts in 2025, with plans to open up to 1,800 new stores. This move mirrors the pace set in 2024, as the company looks to capitalize on growth opportunities in lower-tier cities amid a sluggish economic environment.
In its latest earnings report, Yum China revealed that its sales for 2024 rose by 5% year-over-year, reaching US$11.3 billion—matching market expectations.
“We see significant opportunities to open stores in both top-tier and lower-tier cities,” said Joey Wat, CEO of Yum China, during a Thursday briefing. She highlighted that the company would focus on smaller cities with a strategy that involves lower investments, simpler menus, and more streamlined operations.
This expansion strategy comes as Chinese consumers, wary of ongoing deflation and economic uncertainty, have become more cautious with their spending. With concerns about a potential trade war with the U.S. following Donald Trump’s return to the White House, many are bracing for tougher times ahead.
Yum China has allocated a substantial portion of its 2024 capital expenditure—estimated at US$700 million to US$800 million—for new store openings. The company remains committed to offering value for money, supporting its strategy with various promotions, according to Deutsche Bank analyst Han Zhang.
However, Yum China has refrained from providing guidance on same-store sales growth for 2025, citing potential consumer spending slowdowns due to macroeconomic uncertainties.
The company’s store expansion plans for 2025 aim to add between 1,600 and 1,800 outlets, slightly fewer than the 1,751 stores opened in 2024. In the fourth quarter of 2024 alone, Yum China opened 534 new locations.
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