KFC rebounds with new stores

Fried-chicken chain KFC is speeding up store upgrade plans as the radical new formats help claw back its "share of stomach".

The chain, owned by Restaurant Brands, unveiled its 13th new-look store in Ponsonby last week and intends growing that to 22 by the end of its financial year in February.

The extensive refurbishments are part of a raft of initiatives launched last year to bring customers back to the stores - and so far results have exceeded expectations.

Sales have risen by an average of 20 to 30 per cent at the new-format stores - redesigned inside and out with modern amenities such as plasma TVs, outdoor seating, larger tables for family groups and new branding.

The new format has so impressed the brand's international owner, Yum! Restaurants, that it will be adopted for new KFCs worldwide.

KFC general manager Rod de Vries said revitalisation was necessary as the chain faced tough competition for "share of stomach" against burger chains and others in the burgeoning quick service market.

After reporting a $36.1 million trading profit in 2002, KFC profits slid for two years, dragging profits of Restaurant Brands down with it.

KFC, with a 35-year history in New Zealand, had taken its eye off the ball, said de Vries.

That was in a range of areas from operational systems and staff training to the 88 stores themselves, which had not been touched for 20 years.

The company has spent between $500,000 and $1 million on each new fit- out and KFC plans to upgrade them all within two to four years.

"We want to show the public KFC is alive and well and we're investing in it," de Vries said.

The continued recovery of KFC helped drive a $1.9 million rise in the company's first-quarter sales in May.

With sales rising $2.7 million over the quarter to $41.4 million, the chicken chain contributed 56 per cent of Restaurant Brands' total sales ahead of Pizza Hut and Starbucks Coffee. KFC has also revamped its menu with salads and new chicken products and promotions.

"We think we've got the best food offer and now the best asset in the quick-service restaurant business," said de Vries.

As lifestyles changed and people were cooking less, de Vries was aiming for KFC to be the top performer in that market.