Business
Adapting to Change: How KFC, McDonald’s, and Haidilao are Leveraging Small-Store Formats to Counter China’s Consumption Downgrade
KFC, McDonald's, and Haidilao are promoting compact-store designs to combat China's decreasing consumer spending. These fast-food chains are expanding their reach to smaller cities, employing a smaller store model to offset China's declining consumption.
Every day at about 10 in the morning, Tommy Zhang, a medical scientist based in Shenzhen, exits the metro and makes his way to his workplace situated in the city's lively university district. He consistently notices a food kiosk on his route over the footbridge, where numerous patrons queue for their $2.10 breakfast to-go.
The booth, identifiable by its unique red symbol, is owned by KFC, a fast-food chain run by the franchise owner, Yum China Holdings. They provide a variety of ready-to-go meal bundles for speedy collection. Zhang noted that breakfast from this place is especially favored by local employees, likely due to their need to report to their jobs on time.
"He mentioned that they appear to be thriving in their business by leveraging the pedestrian flow in that area."
Comparable food booths operated by other well-known restaurant franchises are rapidly increasing all over China, according to posts on Xiaohongshu, a social media platform similar to Instagram in China. For instance, McDonald's has been observed establishing small stands and food carts in public areas such as subway stations, streets, and parks in cities including Beijing, Guangzhou, and Changsha.
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