Western fast food gaining in China

By Ted Anthony
Associated Press

Everything here is clearly Chinese except for the Southern colonel and the fried chicken. Associated Press

There's more: Taco Bell will expand across China soon. Pizza Hut will step up its home deliveries. And McDonald's, which has 560 restaurants there, plans to open 100 more.

As China increasingly embraces the West and its snack food, U.S. fast-food chains are expanding rapidly in the world's biggest market.

On Thursday, executives from Louisville, Ky.-based Yum! Restaurants offered an optimistic blueprint for their company's KFC, Taco Bell and Pizza Hut restaurants ahead of a meeting of regional managers marking the opening of KFC's 1,000th outlet in China.

And the state-controlled newspaper China Daily said that McDonald's planned to open nearly 100 more restaurants this year. It quoted Tim Lai, northern China managing director of McDonald's China Development Co.

Plans are also under way for more sites of the Chinese version of Taco Bell beyond its Shanghai location.

Gearing fast food toward local stomachs while retaining its prestige as a foreign brand is a delicate balance. KFC has adapted with fare like the "Old Beijing Twister" — a wrap modeled after the way Peking duck is served, but with fried chicken inside.

"In our business, it's very simple. You have to respond to consumers' demands. As they become more sophisticated, we need to become more sophisticated," said J. Samuel Su, greater China president for Yum!.

KFC opened its first China restaurant in Beijing in 1987, and the capital city now has more than 100 sites. Nationwide, Yum! opened 230 new KFC outlets last year.

In Urumqi, capital of China's heavily Muslim Xinjiang region, the Colonel smiles next to lettering in English, Chinese and Arabic. In Guiyang, in southwestern China, managers removed old-fashioned glasses from his plastic statue out front and replaced them with the kind worn by retired President Jiang Zemin.

KFC operates in every Chinese province and region except Tibet. That won't last long, company officials say, even if limited road, rail and air links remain an obstacle in guaranteeing supplies to outlets.

"We do have plans to enter Tibet. I can't tell you when," said Su.

Yum! — which also owns Long John Silver's seafood restaurants and the A&W chain that specializes in root beer and burgers — has targeted 15 percent growth for the company's international operation, and executives say China regularly surpasses that.

KFC's drive-through outlet in Beijing is its only one in China, but it plans to open more — a move that is indicative of the sharp growth in private car ownership among urban Chinese.

Yum! is also planning a slower expansion for Pizza Hut, said Peter A. Bassi, chairman of Yum! Restaurants International. He said he expects that to grow with the affluence of the Chinese people.

With "DVDs and air conditioning in every room," the people want to stay at home, he said. So it means they want a pizza delivered.