Yum Brands China Sales Plummet

Yum Brands—owner of KFC, Taco Bell, and Pizza Hut—has been one of the most successful U.S. consumer brands in China. But the company’s growth engine is sputtering. It turns out that it’s tough to sell fried chicken during avian flu season. In its third-quarter results, released Tuesday, the company said same-store sales in China fell 13 percent in July from the year before. Yum blamed concerns over safety violations in China’s chicken supply as well as this year’s outbreak of bird flu. Other analysts have suggested that Yum’s stores lack hot-weather offerings that appeal to Chinese consumers. Either way, the results undermine the confidence investors had that rampant Chinese growth can make up for sluggish U.S. demand. The stock was off 3 percent in morning trading.