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KFC Q2 data offer gauge of recovery
Last Updated: 2014-07-17 04:32 | Global Times
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KFC and its cousin Pizza Hut have earned respect - and lavish riches for shareholders - not simply by currying favor with top Chinese authorities but by doing good business, and providing innovations China's central planners want, like a safe food chain.

That approach comes from necessity. KFC parent Yum! Brands has been working to rebuild customer trust since December 2012, when local media reported two of KFC's suppliers had purchased antibiotics-laced poultry from farmers. Same-store sales at the China division fell 13 percent last year.

On top of that comes another challenge: having created the standard by which other purveyors of nutrition to China's 1.3 billion stomachs are being judged, Yum! is struggling to revitalize its recipe.

Sales had already rebounded in the first quarter, in part thanks to reduced comparisons from the previous year. But second-quarter results, to be released Thursday, will be critical to determining whether the $36 billion Yum!'s existential crisis in China is coming to some resolution.

The author is Rob Cox, a Reuters Breaking views columnist.

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