The crunch at fast food chain KFC is not one of credit but the sound of consumers biting into hot wings. Famous for its “Finger Lickin’ Good” chicken, the chain is expanding rapidly in the UK.
KFC recorded a 14% rise in sales last year and opened its first drive-through restaurant. In its first week, the drive-through service broke the chain’s weekly turnover records by taking 100,000.
The restaurant chain, which employs 20,000 people in 760 outlets, is now investing 150m in creating 9,000 jobs and opening 200 new restaurants in Britain by 2015.
So what is the secret of the firm’s success? While the company’s marketing may boast of the “Colonel’s Secret Recipe”, is there a more strategic business focus behind the slogans? KFC chief executive Martin Shuker claims that KFC is doing well because it has ploughed its revenues into creating new value-for-money offers for cash-strapped consumers. He says: “We are already seeing customers responding really well to valuable offers like the Snack Box and Bargain Bucket.”
With so many concerns about rising levels of obesity in the UK, KFC is also promoting a greater variety of food than ever before, in the hope of appealing to a wider range of people and avoiding being perceived as undesirably unhealthy. Recent initiatives have included a boneless chicken range and a selection of salads, wraps and mini-burgers, alongside a new breakfast menu. It is also axing unhealthy trans-fats from its menu.
Shuker admits that with a spotlight on obesity and the Department of Health’s Change for Life initiative, the company has faced “”all sorts of hurdles”” but argues that by focusing marketing on such issues as the “”quality of our chicken”“, it aims to keep consumers happy.
Mark Simpson, a freelance food analyst, says that KFC is doing a good job of getting its message across: “In marketing terms, people are telling themselves eating fast-food chicken is not quite as bad as eating fast-food beef. There is a perceived health gain which is boosting the market.”
The company’s marketing has not always pleased consumers. In May 2005, an ad for the KFC Zinger Crunch salad became the UK’s most complained about ad, according to the Advertising Standards Authority. The ad, featuring women working in a call centre singing with their mouths full, attracted 1,671 complaints. Viewers said it encouraged bad manners among children, making it appear funny to speak or sing with a mouth full of food.
The ASA did not uphold the complaint on the grounds that it was up to parents or guardians to teach their children good table manners, not TV ads. But Shuker says that current advertising will be focusing on crowd-pleasing ideas such as better nutritional value and eco-friendly packaging.
As well as pleasing anxious mothers, KFC’s future ads also aim to help the brand beat off competition from independent outlets. While the recession may benefit fast food brands, many of the smaller brands and independent businesses are trying hard to undercut the large chains such as KFC.
“We are all too aware of the increasing competition we face from independent franchises,” claims Shuker. But analyst Mintel suggests that the company may not have too much to worry about; the chicken and burger bar market is dominated by the major global fast food brands. KFC is the second-largest fast food restaurant in the chicken and burger bars category, behind McDonald’s, which has almost 1,300 outlets.
KFC is also looking to improve its image as a corporation. It has come under fire for its business actions a number of times since its arrival on British shores in 1965.
Greenpeace accused the restaurant chain of contributing to the destruction of the Amazon Rainforest over its use of soya bean grown in the region. It has also come under fire from the People for the Ethical Treatment of Animals (PETA) charity, for its treatment of the animals used for its products.
Shuker says that he is aware of the work to do. “Like any business, it’s our job to overcome these [hurdles] and we have. We will continually address these concerns.”
While fast food is sometimes seen as a simple option, KFC’s challenge now is to tie together all the elements of its complex brand identity. It hopes that by improving its corporate reputation and offering a wider variety of options at value-for-money prices, it can keep taking a large bite out of consumer wallets throughout 2009.