This article is part of a multi-part story on Yum! Brands' newest marketing strategies. See more coverage here.
In the United States, KFC struggled for much of 2010, logging same-store sales losses of 4 percent, 7 percent and 8 percent for the first three quarters, respectively, before swinging to a 1-percent gain in the fourth quarter of 2010 and the first quarter of this year.
But comparable sales slipped 5 percent in the second quarter of this year, and KFC has turned its advertising again to Kentucky Grilled Chicken. The revamped product now features breast pieces that are 20-percent larger.
In China, however, KFC has no problem with comparable sales, which rose 17 percent in the second quarter. The brand is the powerhouse behind sales and unit growth not only in China but also in emerging markets like Thailand, France and the African subcontinent.
“KFC outside the U.S. is a more dynamic, big-box format that’s more akin to McDonald’s,” Novak said.
“There’s been a lot more innovation built into the menu in most countries outside the U.S., because [chain founder] Col. Sanders set the U.S. brand up with a small-box focus on chicken on the bone and sticking to your knitting,” he said. “It’s hard for us to turn it into the multi-variety, multi-daypart brand we have in emerging markets. And we don’t have a franchise community as enlightened as we have outside the U.S.”
KFC’s current “Today tastes so good” U.S. advertising slogan follows a very short-lived “Un-Think” campaign that debuted around the time of the first launch of Kentucky Grilled Chicken in 2009.
But even successful introductions of the Double Down and the Doublicious have not led to consistently rising sales or fended off competition from other chicken chains.
Analyst take: “KFC continues to cede a lot of market share to privately held Chick-fil-A,” wrote Mark Kalinowski of Janney Capital Markets. “Lapping an easy negative-7-percent comparison from the second quarter of last year did not help KFC U.S.”
Watch KFC's commercial for its relaunched Kentucky Grilled Chicken.
Contact Mark Brandau at [email protected].
Follow him on Twitter: @Mark_from_NRN
