Diners not biting on KFC's China revival campaign

Stubborn food safety worries

The Shanghai Food and Drug Administration investigated the chicken contamination incident. It did not bring a case against Yum China and did not assess a fine.

The restaurant operator quickly responded by cutting poor performers from its poultry supplier network. Its "I Commit" public relations push features KFC workers, including KFC China Chief Executive Sam Su, who said the chicken in China is the same as what's served at its restaurants around the world.

The message is not having the desired effect on Ao Kun, 25, an investment manager from Jiangxi Province.

The more KFC promotes its food quality, "the more I go off them," he said while eating a hamburger combo meal at Burger King. "They keep harking on about it again and again. It's not their competitors that are beating them, it's themselves."

An online poll of 1,000 Chinese conducted by ConsumerEdge Research during the first three weeks of November found that safety concerns remained prominent.

About 39 percent of survey respondents "strongly agreed" that they were concerned about antibiotics in KFC chicken, while 33 percent said the same about bird flu and KFC chicken.

Yum's sales, which fell sharply in late December 2012 after the antibiotic residue media report, took another hit from a bird flu outbreak in China in April.

Worries about antibiotics in KFC chicken were strongest among women, low-income diners, people in the 18-to-34 age group, residents of China's largest cities and people who ate at KFC in the month before the survey.

"This antibiotic thing is really being stubborn," said Peter Reidhead, the ConsumerEdge analyst who runs the China survey.

Yum on Monday said sales at established KFC restaurants in China were flat for the month of November.

But a closer look at the results suggested that KFC continues to struggle. A limited-time half-price offer on buckets of KFC chicken fueled a 16 percent increase in same-restaurant sales for the first 10 days of November. But once the promotion expired, sales were down about 8 percent for the remainder of the month.

KFC China is not repeating the special in December.