Sales were up 37.6% for Kentucky Fried Chicken Japan Ltd. (KFC) in May compared to the same month last year, and it shocked the food-service industry.
Since the spread of the coronavirus, sales at izakaya Japanese pubs and restaurant chains drastically decreased, whereas fast-food restaurants have been doing pretty well.
It's not that KFC has done anything special during the pandemic, but what they have been working on for years is finally paying off.
Normally, many KFC customers, about 70% to 80% of them, take their food to go and eat it at home. The company was also far-sighted by introducing drive-throughs early on, so customers could stay inside their cars to order and receive their food.
KFC is thoroughly committed to maintaining the quality of its chicken, most of which the company purchases from contracted domestic farmers. It only takes about two to three days to ship the pieces of chicken from the farmers to each KFC restaurant, while it takes a few weeks or even more than a month for the meat to arrive from Southeast Asian and South American countries.
Akiko Arai, the head of KFC's public relations department, is confident in the company's products.
"The texture of the chicken changes as more time passes. KFC's chicken tastes fresh, and it's possible to maintain that quality for customers who take their orders to go."
--McDonald's investing in tech
McDonald's Company (Japan) Ltd. has also enjoyed a boost in sales of 15.2% in May. The company closed down unprofitable restaurants and changed its direction toward investing in digitization, and both have worked out well for the company.
By using the company's Mobile Order service, customers can order and pay for their food via their smartphone, then pick up their order without waiting in line. The system can be used at about 90% of all McDonald's restaurants nationwide.
McDonald's also launched a new service called Park&GO in May. Customers who use this service are able to receive their food, which was ordered with their smartphone, in the McDonald's parking lot. By sending their parking spot number, a employee of the restaurant will deliver their food to their car. The company moved up the launch date of the service by several months.
The company's official app has been downloaded about 70 million times as of the end of March, meaning about more than one in two Japanese have downloaded the app.
--Success of fast-food
The success of KFC and McDonald's are both the envy and the hope of rival food-service companies. They are proof that, depending on the sales tactic, it is possible to improve business.
Beef bowl restaurant franchise Yoshinoya Co. held a tasting event to introduce the company's new dish, a wheat and tororo grated yam beef meal, which was developed over a period of five years. The product was designed with takeaway customers in mind.
The company's sales were down by 7.3% in May.
"We were down [in May]," said one of the company's executives, but was looking to catch up. "People still eat three meals a day, even during the coronavirus pandemic, so we still have a chance."
Companies are also urged to replan their branch restaurant opening strategy.
The sales of the Mos Burger hamburger franchise was up 12.2% in May. However, the percentage of total sales from dine-in customers went down from about 45% to about 10% at one point during the pandemic. The company's restaurants maintained its sales in residential areas but it dropped drastically in shopping and office districts.
Fast-food is cheap for the amount of food a customer can get, so people tend to choose it pretty easily. Fast-food chain operators can expect a robust sales increase if things go well with their product development, expansion of useful services and branching strategies. For example, how do they deal with the changing tastes of consumers? Each and every decision-making step is becoming more and more important for the companies.
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