KFC is riding eight consecutive years of positive same-store sales growth—a comeback that’s progressed beyond the turnaround stage into something more lasting. Now, it’s time to complement one streak with another, chief development officer Brian Cahoe says. KFC opened 55 new U.S. locations in 2021, for a net of four stores. Despite pandemic setbacks, delays, and closures, it represented the first time the chain has been net new unit positive in 17 years.
And Cahoe says KFC will go back-to-back in 2022.
“What you’re seeing in the U.S. is a continuation, and even a building, of momentum of all of the strategies we’ve been bringing to life and the foundation that we’ve put in place,” he says.
In domestic markets, KFC’s same-store sales climbed 12 percent in Q4 and 13 percent for all of 2021, both on a two-year basis.
Beyond coupling sales with unit expansion, KFC’s multi-year effort to reinforce its brand identity is coming into sharper focus as well. This past year, the chain hit a prior goal when it converted 70 percent of its system to the “American Showman” design, recognizable by bright red-and-white stripes (like a chicken bucket), bucket chandeliers, and graphics that serve as an allusion to the Colonel’s hard-working background. A modern take on KFC’s roots.
Cahoe says the brand remodeled “hundreds of assets” over each of the last few years, pandemic conditions or not.
However, during the chain’s sales climb, there’s been underlying innovation at work. KFC’s digital integration, via delivery, pickup, ecommerce, and app, was a development gaining relevance ahead of COVID. But it’s rushed to the surface, just as it has across Yum!’s portfolio and much of the sector. Yum! posted $22 billion in digital sales last year—a company record. KFC’s U.S. digital sales soared 70 percent, year-over-year, driven by its delivery service channel and e-commerce platform that launched nationwide early last year. In Q4, KFC also introduced “Quick Pickup,” where guests walk-in and grab mobile orders out of cubbies. Cahoe says the update, in essence, is rolled out nationally at this point.
All of it, though, is fueling where KFC goes next: the rapid introduction of the company’s “Next Generation” asset base, and all the connectivity that comes with it.
KFC opened its first Next-Gen restaurant in Berea, Kentucky. First introduced in November 2020 and debuted in Q4 2021, it boasts a digital-forward and contactless experience, including the company’s first double drive-thru lane. Additional Next-Gen stores opened in Westfield, Massachusetts, and Detroit.
Sitting today, about 25 percent of KFC’s pipeline are Next-Gen builds, Cahoe says. The only reason the mix isn’t higher is because 2022 represents a transitory phase of sorts, due to construction and general growth timelines. “We went from concept design to last year getting those first locations permitted and built out and now open,” Cahoe says. “And we’ll go through that round of learnings and feedback with franchise operators.”
In other terms, learnings and field experience are influencing KFC’s next act. But it’s coming fast.
Pradnya Bendre, director of KFC U.S. architecture and design development, says flexibility was a key component to concepting the brand’s Next-Gen models. And so were some of the tenets driving the chain’s eight-year comeback. “We wanted to elevate KFC’s distinctive identity and really take it to the next level,” she says. “Especially from the point of new customers emerging in a post-COVID world.”
Reflecting trends seen across quick service, Next-Gen packs digital integration into a smaller footprint, anywhere from 1,300 square feet to 2,200. The lower end is an off-premises-centric model without a dine-in element. There’s a lobby for customers, or couriers, to walk in and grab their food.
The signage is deliberate, too. Dedicated parking spots for online orders. Visible wayfinders to lead customers to an entrance for online orders. And the Quick Pickup shelves are a part of all Next-Gen builds to remove friction inside.
The dual-lane drive-thru is something that can flex as well. Bendre says there are options, based on trade area and markets, and, essentially, how much digital business is part of that location’s mix, to use them as multiple order points or to dedicate one as an “express lane” for order-ahead guests. Adding dual lanes is an option KFC wanted to make available for franchisees, she adds, due to how challenging it is (or virtually impossible) to retrofit to current locations.
Meanwhile, there’s work being done in the back of the house to create more efficient flow, Bendre says. “How our back-line responds to the online channel, or how the cook-line responds to the drive-thru channel—it was very important for us that we put focus on those aspects,” she says.