Pizza Hut restaurant in China (Photo : Reuters)
Yum Brands is less yummy in China. The company, which includes Pizza Hut and KFC, earns about 50 percent of its revenue in China, but is seeing its novelty and uniqueness fade. Sales during Q1 (Quarter 1) 2015 dropped 9 percent, to $1.26 billion.
These recent drops in revenue and profits follow declines during Q3 and Q4 of last year. The sales for Q1 2014 equaled $2.62 billion.
When Pizza Hut and KFC, along with other American brands such as McDonald's Corp. entered China in the late 1980s and 1990s, they were novelties, according to The Australian. However, since then many customers have switched to newer rivals.
For example, Liu Yue of Beijing recently dined at the new Pizza Express, even though he has been eating at Pizza Hut for many years. Yue says he wanted to eat at a "nice restraint," rather than a fast food restaurant.
Pizza Express was originally a chain from the U.K., which sells pizzas ranging from $13 to $22. It features toppings such as fennel seeds, spicy Italian sausage, and freshly tossed dough.
Yum Brands tried to add new non-traditional pizza items to its menu, such as fried rice and French steak. The result was bizarre dishes such as a pizza with a sausage-filled crust, topped with crab, squid, and mayonnaise.
Other brands that were launched early in China have also experienced declining sales. They include mighty McDonalds.
In 2012, 39 percent and 33 percent of Chinese consumers said that they thought McDonald's and Pizza Hut were respectively "desirable" brands, according to The Wall Street Journal. That figure has fallen to less than 25 percent for both brands.
One employee in China's government says that Pizza Hut does not sell "authentic" Chinese food. Instead, it sells food that it assumes Chinese will enjoy.
