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By LI Ye

Yum China aims to have 20,000 stores in China by 2026, raising the target for net new store openings in 2023 by 300 stores. Yum currently has 13,700 stores.

Joey Wat, CEO of Yum China, said that in the coming three years, KFC will open over 1,200 new stores each year, with franchise stores accounting for around 20 percent, primarily targeting expressway service stations, hospitals, and universities. Pizza Hut aims to maintain a net new store target of 400-500 per year for three years, and coffee brand Lavazza aims to reach 1,000 stores.

The operator of KFC, Pizza Hut, and Taco Bell also owns Chinese chains like Little Sheep and Huang Ji Huang, as well as the joint venture coffee brand Lavazza. KFC and Pizza Hut account for over 90 percent of revenue.

Despite the pandemic, Yum China opened 1,282 new restaurants in 2021 and 1,159 in 2022. But that's not enough. Yum China is counting on KFC and Pizza Hut. The two opened 1,500 new stores in the first eight months of the year, mostly franchises and many mini stores that occupy a smaller area and focus on deliveries. About 5 percent of new Pizza Hut stores last year were small, compared to 50 percent for KFC.

The restaurant's profit margin was 16.1 percent, higher than the 12.1 percent in the same period last year. The company has reduced fixed costs for stores by as much as 25 percent.

Fast food giants are all accelerating their store expansions. McDonald's plans to have 10,000 restaurants in China by 2028 and penetration of lower-tier markets has become a priority. KFC is planning stores in 800 cities where they currently have no presence.