Last Updated Apr 20, 2010 10:56 AM EDT
Sure, the hailstorm of news reports and blog posts, not to mention late night jokes, will undoubtedly lift sales for the quarter, but the reality is that boosting restaurant sales in a long-term, meaningful way is a much less exciting endeavor. In fact, it's downright boring, involving things like improving customer service, sharpening up restaurant design and ensuring the restrooms don't make the gas stations down the road look good.
And in this department, KFC could use some work. Many of their restaurants are dingy and uninviting and the workers often look like they're one Double Down away from quitting their crappy jobs. And the inexplicable fusion of KFCs under the same roof as its corporate sister Taco Bell doesn't help with these image problems. What do tacos and fried chicken have to do with one another, again? Reminds me of Chinese places that insist on selling sushi, which leaves you with the impression that neither the Chinese nor the sushi is going to be very good.
Some ten years ago, McDonald's (MCD) realized they had a similar problem with dingy restaurants and surly, slow service. Existing restaurants were losing sales and by the end of 2002, the stock price had fallen 60% in three years. So the company dispatched "customer recovery teams" and required its workers to undergo retraining. It mandated improved cleanliness and started the process of modeling restaurants to look more modern (goodbye lifeguard orange seats). The results is one of those remarkable turnarounds that business school students have to read about.
And yes, interesting new product entries have been part of McDonald's success, but the company realized that there's no point selling a new product in an old store.
KFC would be wise to steal some of McDonald's secrets. Unlike its other corporate sister Pizza Hut, KFC is languishing. Between 2005 and 2009, KFC's market share has fallen six points while the overall category of fast food chicken grew, according to research firm Technomic. And KFC sales dropped 6% to $4.9 billion last year. Double Downs, even if their sales soar beyond the wildest expectations, are only a quick fix for a bigger problem.
Image from Flickr user Scott Ableman