Yum China announced plans to rollout thousands of new locations across mainland China in the next two years, highlighting the fast-food giant’s ambitious plans for continued expansion.
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The operator of KFC and Pizza Hut in China said is targeting 20,000 stores nationwide by 2026, which will extend its reach to approximately 700 million people, or around half of the country’s population.
“The China market will offer us ample white space for the foreseeable future. On top of the opportunity to serve more people is a favorable mix change, as Chinese consumers in lower-tier cities gradually upgrade their consumption,” said Joey Wat, CEO of Yum China.
“As the largest restaurant company in China, we are uniquely positioned to capitalize on this trend. In fact, over half of our new stores have been in lower-tier cities in recent years. A good share of our future growth should come from the growing pool of consumers in such markets.”
The CEO, in her annual letter to stockholders, said growth opportunities in China continue to be incredibly exciting, with China expected to continue to be the largest single contributor to global economic growth in 2024.
Today, Yum Brands operates in over 2,000 cities across China, and currently serves approximately one-third of China’s population.
“Our core brands are deeply rooted in China and are beloved by millions of consumers. But we can never rest on our laurels,” said Wat. “We’ve worked hard over the past decades to develop industry-leading operational capabilities, outstanding customer care, and a world-class supply chain – all backed by advanced technology. The breadth and depth of these capabilities set us apart and undergird our sustained success.”
In 2023, Yum China returned a record USD 833 million to investors through dividends and share repurchases, representing 75 percent of annual operating profit. The company said intends to step up the pace of returns going forward, planning dividends and share repurchases of at least USD 3 billion from 2024 to 2026, with USD 1.5 billion planned for 2024.
“As we look to the future, we remain steadfast in our pursuit of excellence and innovation, and unwavering in our commitment to achieving our growth targets and generating long-term sustainable value for our stockholders,” the CEO concluded.
Yum China has over 400,000 employees and operates over 14,000 restaurants under six brands, including KFC, Pizza Hut, Lavazza, Little Sheep, Huang Ji Huang, and Taco Bell.