As chicken demand surges in the United States like never before, KFC, which pioneered the "chicken bucket" culture, appears to be posting weak results. KFC is rolling out various self-help measures, including price cuts and a brand refresh, but it remains to be seen whether these strategies will work.
According to Bloomberg on the 28th (local time), KFC has been suffering from poor performance despite the "chicken boom," unlike its competitors. While chicken franchises Chick-fil-A, Popeyes, Raising Cane's and McDonald's have all set sales records, KFC is the only one facing a sales decline. Over the past year, KFC posted a 5.2% year-over-year sales drop, the sole decline among the 10 major chicken chains.
Some analysts say the core menu of "bone-in chicken" has been a decisive misstep behind KFC's slump. As at its initial launch, KFC has focused on selling bone-in chicken by the bucket, a direction that does not match the current trend favoring "boneless" chicken centered on chicken breast. A survey by research firm Circana found that since 2020, U.S. sales of bone-in chicken have fallen 4%, while boneless products have risen 11%.
Improving the aging brand image is also seen as an urgent task. During the COVID-19 pandemic, KFC closed some 300 stores in the United States, and considering that Taco Bell opened more than 400 locations in the same period, there are calls to attract younger customers. In fact, Generation Z (born 1997–2012) accounts for about 6% of KFC's total customers. Precious McMillan, 34, who lives in Kentucky, said in a Bloomberg interview, "KFC stores are old and the atmosphere is dull," adding, "I would rather go to the Popeyes right next door."
Sensing the seriousness, KFC is also moving to revise its strategy, most notably by pivoting to a boneless menu lineup. Catherine Tan-Gillespie, head of KFC's U.S. unit, said, "We are reorganizing the menu in the way visitors want," adding, "We are considering a bucket for one person, a bucket for two people, and new combinations centered on tenders (chicken breast strips)." The specific launch schedule has not been disclosed, but it is expected to be unveiled around next year.
Price cuts and a brand renewal are also underway. The price of the signature chicken sandwich has been lowered from $5.49 to $3.99, and the ad campaign fronted by Colonel Sanders, the founder and KFC's iconic mascot, has been revived. In addition, by running an ad starring chef and actor Matty Matheson, KFC is seen as embarking in earnest on "Generation Z customer acquisition."
These moves appear to benchmark the success of Taco Bell, which is under parent company Yum! Brands. Taco Bell has offset KFC's slump by rolling out limited-time menus and aggressive viral marketing, accounting for 82% of total profit in the United States this year. Yum! Brands' stock is up 6% this year alone, hitting a record high.
Whether KFC can rebound is expected to be an important test for new Chief Executive Officer Chris Turner, who took office in October. Mark Kalinowski, head of Kalinowski Research, said, "KFC is still the symbol of bucket chicken," advising, "It needs a careful balance to adapt swiftly to trends without losing existing customers."
Meanwhile, Americans' chicken consumption is expected to steadily increase for the time being. According to the U.S. Department of Agriculture (USDA), per capita chicken consumption in the United States is projected to reach 105 pounds (about 48 kg) a year by 2030. More than 60% of fast-food restaurants nationwide in the United States are selling chicken sandwich menus.