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An explosion of food deliveries is reshaping KFC ​China, the country’s largest ​restaurant brand, boosting sales but squeezing margins.

Delivery sales at ​the brand grew 33% year-on-year and contributed roughly 55% of total sales, up from 43% last year, parent company Yum China reported Wednesday.

Yum China’s total same-store ​sales were flat, although new restaurants pushed sales up 4%, and its operating ​profit grew 12% to $447 million. Food delivery in China has become intensely competitive over the last year, with e-commerce giants Alibaba and JD.com aggressively ​pursuing market share by offering coupons and discounts ⁠on products ‌across menus, from ice cream and takeaway coffees ​to KFC’s ​fried chicken.

So-called “instant retail” – goods delivered within the hour – ⁠has drawn scrutiny from Chinese regulators who have repeatedly ​warned against race-to-the-bottom competition among food delivery firms.



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