In 2024, major fast-food brands Yum China and McDonald’s China achieved substantial growth, opening record numbers of new stores and reinforcing their positions in the competitive Chinese market.
Both companies emphasized operational efficiency, product innovation—particularly in coffee—and expanding their footprint in lower-tier cities to maintain momentum as consumer demand continued to rise.
This expansion comes amid broader growth in China’s restaurant sector. According to the National Bureau of Statistics, the country’s total catering revenue reached 5.57 trillion yuan ($762.37 billion) in 2024, marking a 5.3 percent year-on-year increase.
Zhu Danpeng, an independent food and beverage analyst, attributes the success of Western fast-food chains in China to several key factors. “A steady influx of younger consumers provides a consistent customer base, and the busy lifestyles of many people make quick and convenient meal options increasingly popular. These chains offer good value for money, which enhances their appeal,” he said. “Moreover, their strong brand presence, extensive operations, and loyal customer base keep them ahead of the competition.”
Yum China Leads with Strong Financial Growth
Yum China, the operator of KFC, Pizza Hut, and Lavazza in the country, reported impressive financial results in 2024, posting record revenue and profitability.
The company’s total revenue grew 3 percent year-over-year to $11.3 billion, with same-store sales reaching 97 percent of the previous year’s levels. Core operating profit increased by 12 percent.
In terms of expansion, Yum China opened a record 1,751 net new stores—an increase of 12 percent—bringing the total number of locations to 16,395. Delivery sales rose 14 percent year-over-year.
KFC, Yum China’s largest brand, played a central role in this growth. Revenue from KFC increased 5 percent, reaching $8.5 billion. The brand also opened 1,352 new stores, the most in its history, bringing its total to 11,648 locations across over 2,200 regions in China.
Approximately 30 percent of these new stores were franchised, a move that helped the company tap into opportunities in lower-tier cities, rural areas, and high-traffic spots like highways and campuses.
“KFC’s potential for growth in China is vast,” said Adrian Ding, CFO of Yum China. “Franchising helps us unlock opportunities in areas with high demand but fewer operational challenges.”
Product Innovation and Coffee Driving Growth for KFC
Product innovation has played a crucial role in KFC’s success. Its classic offerings, such as the original recipe chicken and whole chicken, saw double-digit sales growth. Meanwhile, new menu items, such as the handshaken Americano with frozen pear, a popular northern Chinese snack, piqued consumer interest.
Coffee, in particular, has been a major growth driver for KFC. KCOFFEE, the brand’s coffee segment, sold 250 million cups in 2024, a 30 percent increase from the previous year. The number of KCOFFEE cafes grew significantly, from 50 locations in 2023 to 700 in 2024, with plans to expand to 1,300 by 2025.
“The synergy between KCOFFEE and KFC stores has driven both sales and profit growth,” Ding added.
Pizza Hut and Lavazza Follow Suit with Strong Performances
Joey Wat, CEO of Yum China, called 2024 an “inflection point” for Pizza Hut, which saw a 2 percent increase in revenue to $2.26 billion and a 19 percent rise in profits, reaching $157 million. The brand also opened a record 412 new stores, bringing its total to 3,724 locations.
Pizza Hut’s repositioning strategy, which included expanding its pricing range and targeting the mass market, led to a 50 percent surge in sales of pizzas priced under 50 yuan. Additionally, the introduction of Pizza Dough Burgers in April added to its growth.
The brand also continued its rollout of the WOW model, a streamlined, low-cost format aimed at younger consumers. By the end of 2024, over 200 WOW stores had opened.
Lavazza, Yum China’s high-end coffee brand, achieved profitability for the first time, with retail sales growing by over 30 percent.
Looking Ahead
Despite growing competition, Yum China remains optimistic about the future. “We are excited about the significant growth opportunities in China,” Wat said. “Through tailored store models, we are expanding with both company-owned and franchised stores, and we are on track to achieve our goal of 20,000 stores by 2026.”
Related topics
