March 23, 2020 / 11:50 AM / 8 days ago

Yum China says seeing early signs of recovery from COVID-19 fallout

A KFC restaurant is seen in Shanghai, China March 12, 2019. REUTERS/Aly Song/Files

(Reuters) - Yum China Holdings Inc (YUMC.N) said on Monday its business was in the early stages of recovery, weeks after the fast-food chain operator had to close over a third of its outlets at the peak of the coronavirus outbreak, which originated in the country.

Yum China, the exclusive licensee of the KFC, Pizza Hut and Taco Bell brands in China, said it was gradually reopening stores in the country, adding that 95% of its outlets were open either partially or fully.

Same-store sales were recently down about 20%, the company said, better than the 40%-50% decline it witnessed during the Chinese New Year holiday period, earlier this year.

Yum China said traffic at open stores was recovering slowly, but remained well below pre-outbreak levels.

It said delivery sales grew year over year, driven by the launch of contactless delivery late in January. It also added contactless pick-up and corporate catering services as sanitary options for consumers and corporate customers.

The declining number of coronavirus cases in China has encouraged some consumers to venture back into malls and restaurants even as shops shut their doors across Europe and the United States.

The pandemic, which has infected more than 80,000 people in China and killed over 3,200, had kept hundreds of millions stuck at home since late January. Mainland China on Monday reported a drop in its daily tally of new coronavirus cases, reversing four straight days of increases.

Yum China was spun off from Yum Brands Inc (YUM.N) in 2016 and operates over 8,900 restaurants in more than 1,300 cities in the Asian country.

Reporting by Aishwarya Venugopal in Bengaluru; Editing by Shinjini Ganguli

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