SHENZHEN, China (Reuters) -Yum China Holdings, the parent company of KFC and Pizza Hut in China, said on Monday it will continue a strong campaign to open stores and improve profitability in the coming years, with smaller cities a major target for its businesses.
By 2028, KFC aims to increase its total store count in China by one-third to over 17,000, by which time operating profit would surpass 10 billion yuan ($1.41 billion), using lower capex store models to expand in smaller untapped cities, Yum China said.
The group said it would add over 600 net new Pizza Hut stores annually over the next three years and expected to double operating profit in China for the brand by 2029 versus 2024.
Despite a competitive market in China, Yum China sees huge potential and the company is targeting its reach from one third of the population to half in the medium term, the company's CEO Joey Wat said at a media event in Shenzhen.
While the macroeconomic environment remains difficult, Yum China sees some signs of an improvement in October and November, Wat said.
"Customers still care about prices and about value for money, but overall you can feel that sentiment is becoming more positive."
($1 = 7.1046 Chinese yuan renminbi)
(Reporting by David Kirton in Shenzhen and Casey Hall in Shanghai; Editing by Christian Schmollinger and Frances Kerry)
