More local rivals slow down Yum sales in China

Yum! Brands, owner of the KFC and Pizza Hut brands, said its China same-store sales rose 2 per cent last month, trailing analysts' estimates, as its fried chicken and pizza chains face more local rivals.

Analysts estimated a 6 per cent increase, the average of 10 projections from Consensus Metrix. Sales at KFC stores open at least 12 months on the mainland rose 5 per cent in December, the company said in a filing. Same-store sales at Pizza Hut fell 3 per cent.

The company, which has about 4,460 KFC and 1,100 Pizza Hut locations in China, is enduring more competition from local dining chains such as Dicos and Hua Lai Shi.

KFC also is trying to bring back Chinese diners following an outbreak of avian flu and the investigation of a former supplier for selling food with too much antibiotics.

Yum's China sales plummeted in December 2012 after China Central Television reported that a few poultry farmers doing business with Yum suppliers fed their chickens excessive amounts of antibiotics. That was followed by a bird flu outbreak in the spring.

In November, Yum posted a surprise 1 per cent gain in same-store sales in China after a half-priced chicken deal boosted sales at KFC.