Sales fell by 20% in the first two weeks of March, according to the owner of KFC and Pizza Hut, as a wave of new Covid cases spread across China. As a result, Yum China profit drops.
Yum “The situation has drastically deteriorated,” China warned, citing regional lockdowns as a means of containing the outbreak.
More than 1,100 of its stores are temporarily closed or only offer takeout, and sales are “continuing to decline. China’s lockdowns are among the most severe since the outbreak began.
As the number of new infections of the Omicron variety of Covid rises, they include Jilin province, which is home to firms like Toyota and Volkswagen, as well as technological hub Shenzhen.
Lockdowns have caused Toyota, Volkswagen, and Apple’s Foxconn to shut down activities in the impacted areas.
Foxconn said on Wednesday that after installing a closed-loop system on its campus, it was able to restart some manufacturing in Shenzhen. It means that Foxconn workers in the area are unable to leave the group.
There are fears that the limitations may disrupt global supply lines.
“Our robust supply chain management has shielded us from material business disruptions,” Yum China CEO Joey Wat said.
From 500 in January to 1,100 in March, Yum China said it has stopped or reduced take-out services at more than half of its locations.
About Yum China
Yum China Holdings, Inc. is a Chinese Fortune 500 fast-food restaurant corporation, headquarter of which is in Shanghai, China. The firm is based in the United States. It is one of the largest restaurant enterprises in the world. It has sales of US$ 9.5 billion and 10,600 outlets globally. Yum! Brands spun it out in 2016, and on November 1, 2016, it became a separate, publicly listed corporation. It has 8,484 restaurants in over 1,100 cities in Mainland China, in every province and autonomous area.