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The Economist: Fast food's yummy secret

The Economist Fast food's yummy secret

"IT IS one of the biggest companies in one of the biggest industries in America. Its brand names litter the highways and high streets of the world. From its modest base in Louisville, Kentucky, it oversees the opening of three new restaurants, one of them in China, every day. Last year it earned pre-tax profits of $1 billion on sales of $9 billion. Yet few of its customers have ever heard of it.

But if they know KFC (previously Kentucky Fried Chicken), or Pizza Hut, or Taco Bell, then they know Yum! Brands. The parent of those three fast-food chains, it has 34,000 (mostly franchised) restaurants around the world, 2,000 more than McDonald's. At home in America it accounts for about 4% of all restaurant-industry sales, behind only McDonald's at 6.5%. With 1,378 KFC restaurants in China, and 201 Pizza Huts at mid-2005, Yum! owns two of the best-known brand names in the world's most populous market. Not bad going, you might say, for a company that Pepsi-Cola got rid of in 1997 because, in the words of one PepsiCo executive, �restaurants weren't our schtick�."

NPR Fast-Food Deal a Big Win for Small Migrants' Group
"This spring, the Coalition of Immokalee Workers, a small farm laborers' group, won a surprising victory against the world's second-largest fast-food company.

After a four-year boycott, tomato pickers in Immokalee, Fla., got Yum Brands, the parent company of Taco Bell, to agree to pay them higher wages and -- perhaps more significantly -- to lead a push for more protections for migrant workers.

USA Today Yum Brands builds dynasty in China
Insana: How long can you open 1,000 stores a year?

Novak: A long, long time. We have a tremendous opportunity to open stores all around the world. China is just huge. When you look at just its urban customer; there are 500 million. There are only 290 million people in the U.S. There are close to a billion people in India, where Pizza Hut was just named the most trusted restaurant brand. We've got so much more runway it's unbelievable.

New York Times Diners Walk Through One Door and Visit Two Restaurants
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"Companies say multibranding also helps increase revenue from a single location. Since Taco Bell gets most of its business at lunchtime and KFC gets most of its at dinnertime, combining the restaurants creates a steady flow of business throughout the day, said Amy Sherwood, a spokeswoman for Yum Brands. Similarly, Mr. Bertini of Wendy's said that having customers go to Tim Hortons for coffee, doughnuts and other breakfast items gives the company morning traffic it would not otherwise have.

While Yum's multibranded restaurants are only slightly larger than individual sites in square footage, their sales are between $250,000 and $300,000 a year higher than stand-alone stores, said Mr. Deno. "There are a lot of places that would be too cost-prohibitive for us to add another stand-alone KFC or Taco Bell, like high-cost urban centers or low-density rural areas," said Mr. Deno. "But as a combination, we can do it.""

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The Economist: Fast food's yummy secret

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