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KFC puts ‘stealth kitchens’ on menu to widen reach

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on

NEW DELHI: KFC plans to set up stealth kitchens in India, probably a first for the domestic quick service industry as well, to leverage the rapidly growing online food delivery model used by aggregators such as Swiggy and Zomato.

These standalone full-service KFC kitchens won’t have any customer interface, will not double up as dine-on or take-away stores, and will have minimal branding, KFC India managing director Samir Menon told ETin his first media interview after assuming the top job in November last year.

“We can’t always expect the customer to come to us – we also have to find ways to go the customer as far as possible,” Menon said. “We believe the concept will help create accessibility for customers who don’t necessarily have a KFC around them. These would be places which may not be ready for a full-store, where we can’t set up a store or there is no location to, but areas that are definitely ready from a customer perspective.”

He said KFC, owned by US giant Yum! Brands, is looking at driving delivery in different ways across the business. “Delivery for the category has been growing and fuelled by food aggregators — they fired delivery in a big way and unlocked the ability for consumers to get food whenever they want, wherever they are,” Menon said.

Similar to most quick service brands, KFC’s entry-level products are priced at Rs 30 and above. Of the 345 existing stores KFC India operates, 250 are franchised, while the remaining 95 are equity (Yum!-owned) stores.

Menon said that unlike the US where KFC has refranchised over 90% of its operations, in India the brand will continue to operate through a mix of franchised and equity stores though the ratio will be skewed towards franchisee stores.

“Globally there’s a belief that in some countries, Yum! needs to continue to have a presence to grow the market and work closely with franchise partners to unlock growth,” he said. “At this time, we don’t have a plan for further refranchising.”

Menon said the company will decide on how to split its growth based on how opportunities open up on the development side.

On the back of system sales growth of 18% for the quarter ending December 2017, its sixth consecutive quarter of positive same-store sales, KFC is pushing profitability. “Restructuring with Sapphire Foods and Devyani International, and focusing on three elements of core by shifting the lens back on chicken, core consumers and working on the design template, has started paying off now,” Menon said. “In the last two years, we’ve been fixing the business and getting it to a place where the momentum starts growing.”

KFC, which competes with McDonald’s, Burger King and Carl’s Jr among other global brands in India, is investing aggressively on resourcing and technology, building partnerships across the board, including aggregators, and for last mile reach.

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