Yum Brands' KFC on Wednesday said it will acquire 218 restaurants from its largest franchisee EG Group in the UK and Ireland.
Once the deal is complete, all of the privately-owned EG Group's KFC UK and Ireland businesses will come under Yum's KFC UK and Ireland management.
Fast-Food Chain
The fast-food chain operator said it expects to finalise the transaction by the end of the first half of 2024.
It did not disclose financial terms of the deal.
Strong Demand
In August, Yum Brands beat estimates for quarterly comparable sales and profit as strong demand for cheaper meals and promotional offers at its KFC restaurants countered lackluster traffic at its Taco Bell and Pizza Hut outlets.
Quarterly comparable sales at KFC jumped 13% and topped estimates for an 8.29% growth, as options like the 2-for-$5 fried chicken wrap and launches including chicken nuggets pulled in lower-income consumers struggling with high food prices.
600 New Restaurants
KFC saw the most growth in the US with its lower-income consumers, CEO David Gibbs said on a post-earnings call in August, with the offerings also appealing to new younger customers.
The fried-chicken chain also opened 600 new restaurants across 60 countries in the quarter.
"Chicken has been pretty popular lately...as more and more consumers are consuming chicken over beef, and (KFC has) really went after that market," said Edward Jones analyst Brian Yarbrough.
Cheaper Than Beef
US restaurant chains including McDonald's and Chipotle have signaled that more diners are choosing chicken at a time when beef prices have remained stubbornly high.
Yum Brands' value offerings have also drawn customers from higher-income levels - diners have increasingly started to trade down to the chains from higher-priced fast-casual restaurants, while existing customers have also increased their frequency of purchases, CFO Chris Turner said in an interview.
Article by Reuters, additional reporting by Hospitality Ireland.
