KFC China hikes prices to combat rising costs

Fast food chain Kentucky Fried Chicken has raised its prices in China for the first time in two years, blaming the increases on higher operating costs.

KFC China increased the price of menu items by an average of 2% yesterday, leading to a jump of between 0.5 yuan (US$0.07) and 2 yuan for most items, said Yum China Holdings, the operator of KFC’s China restaurants.

However, the fast food chain kept the price of its highly popular combo meals, such as the “Crazy Thursday” bundle, the “Crazy Sunday” campaign and the children’s meals, unchanged.

KFC in China. File Photo

KFC has adjusted the price of some items on its menu in response to market challenges, media reports said yesterday, citing a company executive. KFC will continue to make regular assessments and to prudently adjust its price structure in line with changes in operating costs, the person added.

Many netizens complained about the price hike on Chinese social media, saying that they’ve already felt the pinch as living expenses have been generally going up. “I woke up this morning to find the spicy chicken drum burger more expensive. I will not buy KFC meals as frequently as before,” said one netizen on Weibo, the Chinese equivalent of X.

Increases in the costs of raw materials and the supply chain as well as staff wages since 2023, have led to this price hike, the Securities Times quoted food industry analyst Zhu Danpeng as saying.

A 2% price increase is quite modest and will not put too much of an extra burden on customers, said Jiang Han, a senior researcher at think tank Pangoal. In the long run, by doing so, KFC, which runs 11,283 stores across the country, will maintain healthy operations, he said.

His sentiment was echoed by investors, as Yum China Holdings (HK: 9987) rose 1.77% to close at HK$379.6 (US$48.89) yesterday.

KFC, which entered China in 1987, has been expanding the range of prices and lowering the average price, Yum China said Nov. 4. The brand’s pricing in the third quarter was slightly lower than the previous quarter, but higher than in 2019, it added.

Rival McDonald’s raised prices by an average of 3% in China in December last year, citing higher operating costs.