Pizza Hut Continues To Find Plenty Of Success In China

Pizza Hut found plenty of success in China during the fourth quarter of 2013.

In a recent earnings report issued by the folks at Yum! Brands Inc., the company revealed that its pizza restaurant continues to do a considerable amount of business overseas. According to chairman and CEO David Novak, the company intends to capitalize on the chain’s popularity over the course of 2014.

While KFC didn’t do nearly as well as the company had hoped last year, Pizza Hut was definitely a popular choice for hungry folks in China. Novak said the chain was able to grow its asset base by 28 percent while increasing same-store sales by four percent at casual dining restaurants. They also expanded breakfast into 120 new locations.

“We also achieved solid unit economics at Pizza Hut Home Service, and intend to scale this business over time. Overall, we opened 740 new restaurants in China, further strengthening our category-leading positions,” Novak added.

Pizza Hut plans to start serving breakfast in an additional 200 locations throughout China in 2014. Novak said the company is also toying with the idea of rolling out a late-night program in the region that would include the sale of alcohol.

“The (Pizza Hut) brand has never been more powerful. We have very little competition and we’re in the space pretty much by ourselves,” the CEO continued.

Although the restaurant is presently experiencing a huge boost in business in China, things aren’t looking quite so bright and shiny here in the United States. Same-store sales reportedly dropped four percent during the fourth quarter of 2014, though Novak seems confident that the company can turn things around this year.

“[Pizza Hut] simply wasn’t competitive enough on value. We’re aligning with our franchisees to tackle this issue and bring even more innovation to marketplace. After slow start of the year we expect to fair much better with competitive values,” Novak explained.

The company also intends to make the most of its success on various digital platforms. While Pizza Hut rolled out an app for Xbox 360 last year, it’s currently unclear if the restaurant intends to venture onto other consoles going forward. However, Novak said the company is devoted to exploring any and all digital options.

“Make no mistake, technology is among the highest priorities that we have in our company and all of our businesses are focused on ways that they can harness the power of digital technology to further differentiate our experiences for our customers,” the CEO said.

Are you surprised that Pizza Hut is doing stronger business in China than in the US?