KFC holds top spot in Thailand, so why is it failing at home in the US?

Key issues include relatively slow service and lack of menu innovation. In the US, speed and service quality are paramount, posing a hurdle for KFC. The business has also suffered persistent problems with suppliers over the years.

KFC has often stressed menu innovations, such as introducing boneless chicken in the US. However, some consumers believe that the brand's identity, particularly in the US, is rooted in boned chicken drumsticks.

Chick-fil-A, Popeyes, and Church’s Chicken, though less known, are now rivalling KFC as popular fried chicken choices in the US. Chick-fil-A, in particular, outsells KFC and Burger King.

In Thailand, the scenario is very different: KFC enjoys a 65% market share in the fried chicken segment.

Yum! Brands, KFC's parent company, is finding success primarily through its international branches, with more than half of its revenue coming from Asia, particularly China and Thailand. Thailand, in particular, has consistently shown strong loyalty to KFC, making it a formidable competitor.

KFC's challenges in its home country have led to a decline in performance, including a decrease in the number of US branches. Chick-fil-A is now its biggest competitor, surpassing KFC in taste and service according to many diners, which has hit KFC's market share and profitability in the US.

KFC has more international branches, including its 65% market share in Thailand, but is unable to gain ground in its home country due to intense competition and a shrinking market share. More than half of its revenue comes from Asia, with China holding top spot.

KFC ranked 15th in QSR Magazine’s ranking of the top 50 fast-food chains in terms of sales in the US last year. Chick-fil-A ranked third, trailing only McDonald's and Starbucks. The number of KFC branches also decreased by 35 from the previous year (2021).

Soaring challenges

KFC has recently attempted to improve its speed of service and efficiency. Early this year, KFC branches in the US announced the discontinuation of four menu items: Kentucky Baked Chicken Wings, Chicken Popcorn, Nashville Hot Sauce, and Strawberry Lemonade. This was explained as a move to streamline the menu, reduce complexity in ordering, and create space for the introduction of new items.

However, the website Restaurant Drive reports that Chick-fil-A has the fastest drive-through service, averaging 436 seconds per order this year. The average accuracy in order fulfilment has also increased to 92%, up from 83% the previous year (2022). While Chick-fil-A continues to improve customer service, KFC has faced challenges, and even the company acknowledges that some customers lack confidence in its food delivery service.

Over the years, KFC has grappled with health and hygiene issues within its stores, including dirty tables with food scraps, non-functional restroom locks, and scattered chicken debris. It has responded by boosting the Colonel Sanders marketing icon to stimulate sales and lure back former customers, but newer generations may not feel as familiar with the mascot. In the highly competitive fried chicken and quick-service restaurant (QSR) market, the focus should now shift towards service quality and food excellence.

KFC has faced supply chain issues for several years, both in the US and the UK. There have been times when a significant number of stores had to close due to chicken shortages. Experts suggest that the KFC crisis highlights the importance of not putting all your eggs in one basket when it comes to suppliers. Diversifying and considering alternative options, especially in terms of delivery times, is crucial for many businesses. Although KFC stores may eventually overcome these challenges and resume operations, the damage to reputation is difficult to recover within a short period, affecting both consumers and franchisees within the network.

Allegations that KFC uses genetically modified chickens – so-called "Frankenchickens" – have surfaced for years. As have charges that KFC chickens are often raised in environments with minimal care, focusing on feeding to maximise their size, and thus suffer throughout their lives, with most being unable to walk due to their excessive weight.

KFC has denied the accusations and rumours, pointing to its "open kitchen" approach to prove the chain does not use genetically modified chickens. However, the pressure to improve its animal-welfare practices persists.

The New Zealand Herald newspaper reported last year that KFC is under pressure for refusing to join the "Better Chicken Commitment" initiative against using genetically modified chickens. KFC reasons that its suppliers already adhere to industry animal welfare standards, making it unnecessary to participate in the commitment. However, this decision has led to unfavourable comparisons with Domino's Pizza, which became the first to sign the commitment in New Zealand.

Misplaced branding focus shakes confidence

Kevin Hochman, KFC (US)’s president, said the brand began a decades-long decline in quality and sales after the death of Colonel Sanders in 1980.

KFC was originally known for being easy to buy from, comfortable to dine in, and family-friendly. However, over the years, it has tried to follow new trends, causing the loss of its original identity. The most memorable items on the menu used to be bone-in chicken pieces and mashed potatoes with gravy. However, these items have now become just a part of the broader menu, with new items taking centre stage.

KFC has shifted its focus to new menu items, such as boneless chicken and popcorn chicken These boneless chicken items are marketed to attract new customers, while the brand also connects with consumers using the slogan "Kitchen Fresh Chicken" to dispel rumours about genetically modified chickens. Additionally, KFC is pushing new snackable fried items.

However, experts suggest that KFC's true strength lies in returning to its roots with classic menu items, a crucial variable to overcome competition from other fried chicken chains like Chick-fil-A and Popeyes.