KFC's owner tests a new weapon against Chick-fil-A
KFC's owner is testing a new fast-food chicken chain, and this one has nothing to do with The Colonel. In fact, the new restaurant doesn't even mention any link to KFC or its owner, Yum Brands (YUM).
Instead, the concept store -- called Super Chix -- says it comes from "three food-obsessed friends" who set out to make a better chicken sandwich. "We poured our hearts into creating something better -- what we believe is the best chicken you'll ever try," the Super Chix website says. The first Super Chix location is set to open Wednesday in Arlington, Texas.
A Yum spokeswoman downplayed the restaurant, describing it to Advertising Age as "an exploratory concept that may in the future be considered for international purposes."
But for an exploratory concept, it has a pretty sophisticated Web presence, with a Facebook page, a Twitter account, an Instagram feed and its own URL.
Yum needs a better chicken strategy now that KFC has lost its fried-chicken crown to Chick-fil-A, a rival with far fewer locations. Last year, Chick-fil-A topped $5 billion in sales at its 1,775 locations, The Associated Press reported. And Chick-fil-A even closes all of its locations every Sunday. KFC had 4,438 locations and only pulled in $4.22 billion in U.S. sales.
Yum needed to do something to reverse its chicken-sales decline. So, last year it opened concept store KFC Eleven in Louisville, Ky. Menu items there veered into rice bowls, salads and flatbreads. The company is adding a second location in Louisville this year.
Super Chix only has three types of main dishes on its menu: a chicken sandwich, chicken tenders and salads. Its toppings include three different kinds of pickles, and it offers a "signature sauce" that sounds a bit like the Chick-fil-A sauce at its rival.
Can Yum Brands reverse its chicken fortunes? The company struck gold with its Taco Bell chain in recent years, reinvigorated by the Doritos Locos tacos line. Taco Bell contributes about two-thirds of Yum's operating profit in the U.S., Bloomberg Businessweek reports. Now Yum has an ambitious goal of expanding to 8,000 locations from about 5,000.
Taco Bell saw same-store sales rise by 3 percent last year, while KFC -- and sister chain Pizza Hut -- each saw sales slide 2 percent. Taco Bell also gets higher sales per location than KFC or Pizza Hut, and it has a higher profit margin. It's now pushing new breakfast items and is testing mobile ordering.
KFC has none of that momentum. It also has a fierce and innovative rival in Chick-fil-A. But if Super Chix takes off, Yum has the resources to expand the chain fast -- and perhaps reclaim the industry dominance that kept it going for decades.