You may not be familiar with Yum! Brands Inc. (YUM), but you may have visited one of the restaurants under its umbrella like Taco Bell, Kentucky Fried Chicken (or KFC), Pizza Hut, and two lesser known brands—the Little Sheep and East Dawning in China. Yum! operates over 40,000 restaurants in over 125 countries.
According to IBISWorld, in 2014, Yum! Brands had the second largest market share of 11% in the U.S. fast food industry after McDonald’s (MCD). MCD had the largest share of 17% with 35,000 restaurants worldwide.
Each of the above brands in the chart is different in terms of food they offer. For example, KFC primarily serves chicken items. Pizza Hut serves pizza, pasta, and desserts. Taco Bell serves tacos, burritos, and salads.
KFC and Taco Bell mainly sell fast food and offer drive-thru facilities. Pizza Hut offers full-service sit-in casual dining, as well as pickup and delivery facilities to its customers.
In the U.S., fast food and casual dining restaurants have reached maturity. This is evident in the flat, declining, or negative same-store sales of chains like MCD, Yum! Brands (YUM), Darden Restaurants (DRI), and Bloomin’ Brands (BLMN).
In this series
With sales reaching a plateau in the U.S. market, restaurant chains have reinvented themselves by introducing newer items on the menu or remodeling existing stores. Some are looking for growth outside of the U.S. altogether. To assess Yum! Brands’ efforts on this front, we’ll look at growth in each of the markets it operates in.
This series will also assess the company’s position among its competition such as MCD, Popeyes (or PLKI), Domino’s Pizza (or DPZ), Burger King (or BKW), and other restaurants included in the Consumer Discretionary Select Sector SPDR (XLY).