Bird Flu Slows in China; KFC's Sales Plunge

Panic over bird flu in China seems to be easing up, which is good news for the Chinese—and also for KFC, Bloomberg reported on Tuesday (June 11). The fried-chicken chain has been hit hard by local concerns that KFC's products might be tainted with the flu, which has killed 39 people in China and sickened another 92.

In a U.S. Securities and Exchange Commission filing, KFC's parent, Yum Brands (NYSE:YUM), said KFC same-store sales in China were down 25 percent in May from the year before—which is still high, but a big improvement over April's 36 percent drop. Yum gets more than 50 percent of its revenue from China, where it operates KFC, Pizza Hut and other chains.

KFC isn't alone. McDonald's (NYSE:MCD) also said this week that its same-store sales are down in China, and blamed the problem on bird flu, which has discouraged many customers from eating any kind of poultry. (In most parts of the world, McDonald's is the dominant U.S. fast-food presence, but in China, Yum is the biggest foreign quick-service restaurant operator.)

The bird-flu panic does seem to be subsiding, largely because the disease has killed only 30 additional people in the past two months and shows no sign of being able to pass between humans. But Yum's prediction that the chain's stores "expect a strong bounce-back in 2014"? That remains to be seen.

For more:

- See this Bloomberg story

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