Rising Covic-figures weigh on sales of Yum China.
Yum China's same-store sales in January 2022 improved modestly from the fourth quarter, but were still down year over year, compared to the comparable Chinese New Year Holiday period in 2021. Entering March, the situation has rapidly deteriorated with the highly transmissible Omicron variant causing outbreaks across China, including economically important regions of Guangdong, Shanghai, Shandong and Jilin.
Daily cases in China have hit a two-year high
. Quarter-to-date case counts for 2022 have surpassed that of full year 2021. Stricter preventive health measures and containment measures have been observed nationwide, including multiple rounds of city-wide testing and partial or complete city lockdowns.
Our operations are significantly impacted by the latest outbreaks and the tighter public health measures which resulted in a further reduction of social activities, traveling and consumption," the company said in a statement. Same-store sales decreased approximately 4% year over year for the two months combined in January and February. For the first two weeks of March like-for-like-sales decreased approximately 20%
year over year and is still trending down in recent days.
Over 500 stores were temporarily closed or offered only takeaway
and delivery services at the peak in January 2022 - this number rose to over 1,100 stores as of March 13, 2022.
Total store count of Yum China reached 12,163 as of February 28, 2022, with 375 net new store openings for the two months combined in January and February.Joey Wat, CEO of Yum China
, commented, "As the country battles the surge in COVID-19 cases, we are staying vigilant to ensure the health and safety of our employees and customers. We will keep our restaurants open and provide food services to customers wherever it is possible and safe to do so. Our robust supply chain management has shielded us from material business disruptions. We will continue to drive sales especially in delivery and takeaway occasions
. We will also manage costs diligently, and adjust our operations as well as promotion offers as the situation evolves. With our resilient business models, operational excellence and leading digital and delivery capabilities, we are confident we will overcome this challenging and volatile situation. We will continue to execute our RGM strategic framework to fortify resilience, accelerate growth and widen our strategic moat. We believe that this combination of efforts will enable us to drive long-term growth and generate substantial shareholder value in the years ahead."
About Yum China Holdings, Inc.
Yum China Holdings, Inc. is a licensee of Yum! Brands in mainland China. It has exclusive rights in mainland China to KFC, China's leading quick-service restaurant brand, Pizza Hut, the leading casual dining restaurant brand in China, and Taco Bell, a California-based restaurant chain serving innovative Mexican-inspired food. Yum China also owns the Little Sheep, Huang Ji Huang, East Dawning and COFFii & JOY concepts outright. In addition, Yum China has partnered with Lavazza to explore and develop the Lavazza coffee shop concept in China. The Company had 11,788 restaurants in over 1,600 cities at the end of December 2021.