KFC owner Yum sales take another hit in China

Yum's KFC restaurants in China continue to see falling sales

Sales of US fast food giant Yum Brands, which owns Pizza Hut and KFC, fell for a fourth consecutive quarter as its Chinese business continued to slump.

Yum's Chinese same-store sales fell by more than expected in the second quarter, by 10% despite efforts to regain ground in its biggest market after a meat safety scandal last year.

Globally, revenue fell 3% to $3.1bn in the three months to 13 June.

The firm said its main initiative right now was to get back on track in China.

"The China division remains on track to open at least 700 new restaurants this year, laying the groundwork for future growth," said chief executive Greg Creed in a statement on Tuesday.

The group's KFC restaurants suffered in July last year after a television news story linked the brand to supplier Shanghai Husi Food, which was accused of selling old meat.

KFC, along with fast food giant McDonald's, stopped using meat from the supplier after its operations were suspended in July.

Healthier options

Adding to its China woes, customers in its home market - the US - are also shifting their eating habits to food seen to be healthier, served by competitors like Shake Shack and Chipotle Mexican Grill.

The retailer's net income declined 30% to $235m (£150m) in the same period.

The company has been trying to win back customers with moves such as removing artificial colours and flavours from food at Pizza Hut and Taco Bell, it announced in May.

Its shares fell 1% in after-hours trading in New York after the earnings results came out.

Correction: This story has been amended to make clear that the Shanghai Husi scandal involved allegations of supplying out-of-date, rather than tainted, meat.