Yum! Brands Inc.’s KFC warned that a supply-chain breakdown that has shut more than half of its 900 UK outlets would persist for the rest of the week, continuing to deprive fans of their fried-chicken fix.
KFC said it’s working with new logistical partner Deutsche Post AG to solve a problem that began over the weekend, leaving only 430 British shops with any chicken to cook as of Tuesday (February 20). About 80% of the brand’s UK eateries are franchised.
“We anticipate the number of closures will reduce today and over the coming days,” KFC said in an emailed statement Tuesday. “However, we expect the disruption to some restaurants to continue over the remainder of the week, meaning some will be closed and others operating with a reduced menu or shortened hours.”
KFC overhauled its UK chicken supply chain in November by replacing logistics provider Bidvest Group Ltd. with Deutsche Post’s DHL, better known for delivering books and toys to online shoppers’ homes. At the time, the new supplier described the partnership as “groundbreaking” and said it was “committed to setting a new industry benchmark” in service.
Stifel analyst Chris O’Cull estimates that the roughly 750 KFC outlets earlier affected by the chicken shortage, or about 3.5% of the brand’s global total, generate daily sales of $2.1 million.
KFC, which previously said it picked DHL for its expertise in other industries, this week blamed the chicken shortage on “teething problems” with the new arrangement.
DHL managing director John Boulter apologized in a statement for the inconvenience and disappointment caused to KFC and its customers.
News by Bloomberg, edited by Hospitality Ireland
