Parent company Yum! Brands (YUM) warned Thursday that global profits could suffer this year as sales in China tumble following revelations that one of its suppliers was using tainted and expired meat.A quick response by Yum, which also operates Pizza Hut restaurants in China, doesn't appear to have mattered much. Late Wednesday, the company warned investors that the scandal was going to cause major problems.
KFC will undoubtedly recover from another scandal. History tells us that their will be public outrage for a while, with people swearing off eating at KFC establishments, but then all the fuss will die down and everything will go back to normal.Why? Because no one is willing to give up the convenience of fast food!
I feel hat KFC has enough people that buy it that they will be fine. Considering they have already had numerous scanada.and still are going I think this will be the same. I don't think there is enough competition for them and that they will continue to have their fans and make a profit.
Fast food is still a booming industry in this country and the way that fads go, we'll be over this and onto the next thing before you can say 'double down'. However, in regards to the long term aspect I do think that fast food in general is eventually going to start seeing a decline if they can't provide more value menu items that are health conscious. It's begun with listing the calories on the menu - it will end when parents can't eat at the restaurants their kids love because of calorie, fat and sugar contents.
I think that shares and various other elements for KFC will decline and there will be a permanent hit to the company as there has been in the past where it's lost some of it's revenue from people who just no longer support the company and it's practices. It's a dark day for KFC.