By comparison, KFC and Pizza Hut faced a much tougher quarter. KFC’s U.S. same-store sales dropped 7 percent versus the year-ago period, which Gibbs attributed to lapping the chicken sandwich, in addition to stimulus-fueled consumer wallets. By the end of the quarter, the chicken chain rolled out Mac & Cheese Bowls to directly address value.
Pizza Hut’s domestic comps dropped 4 percent, mostly due to issues with delivery. Yum! is hoping to resolve challenges with greater adoption of third-party partnerships. At the end of Q2, roughly 55 percent of U.S. locations implemented third-party delivery to fulfill orders, up from 40 percent at the start of the quarter. Also, 70 percent of eligible units are promoted on at least one third-party marketplace, an increase from 45 percent in April. Only 35 percent are on multiple third-party websites. Franchisees who’ve implemented both are running mid-single digits higher than those who haven’t.
“Demand remains strong,” Turner said. “Our carryout business was up strongly, but we saw declines again in the delivery business. And so that’s what we are focused on addressing—the availability of drivers to deliver the product whenever a customer wants to order through that channel. We talked about last quarter, we were starting to implement changes. Some of those are internal where we are changing things like our hiring practices to make a faster hiring process because that’s what folks who are in the market for driving jobs look for. But we also talked about how the partnerships with aggregators can help us, as well.”
KFC ended Q2 with 26,521 stores, including 3,942 in the U.S. and 22,579 international. Pizza Hut had 18,591 (6,550 in the U.S. and 12,041 internationally).
During the second quarter, Yum! completed its transfer of Russia-based Pizza Hut locations to a local operator who began the process of rebranding to a new concept. For KFC, the company is in advanced discussions of transferring ownership, operating systems, and master franchise rights to a local operator. Once that’s complete, Yum! will have fully exited Russia.
The 1,165 restaurants were removed from total unit count and total system sales as of the beginning of Q2, negatively impacting each by 2 percentage points. The outlets didn’t affect same-store sales results. Yum! was scheduled to open more than 100 locations in Russia in Q2 before deciding to exit. However, the brand is still confident in hitting its 4-5 percent unit growth projection.
The Habit Burger had 338 units total, with 325 of them being in the U.S. Thanks to a digital promotion during National Burger Month, mobile app downloads increased 10 percent.