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Bird Flu, Slowdown Hit Sales at Fast-food Chains

14 August 2013

CHINA - The bird flu scare and the economic slowdown hit the sales of some Western fast-food chains in China last month.

Yum! Brands Inc's same-store sales in China declined an estimated 13 per cent year-on-year in July, with a 16 per cent decrease at KFC and only three per cent growth at Pizza Hut, Yum! Brands said on Monday (12 August).

Meanwhile, McDonald's Corp — Yum! Brands' main rival — also saw a sales decrease in China.

The company said on 8 August that comparable sales in Asia-Pacific, the Middle East and Africa decreased 1.9 per cent in July, "reflecting negative results in Japan, Australia and China".

China's economic growth slowdown may be an important reason behind the declines, some analysts said, although McDonald's attributed the lower sales in those regions partly to the shift in timing of Ramadan.

Muslims across the globe observe Ramadan as a month of fasting.

"Due to the economic slowdown, consumption is weak, while the costs of raw materials, human resources and rents are all on the rise," said Li Weihua, deputy director of the franchise research center of the China University of Political Science and Law.

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