Yum China says tech investments let it open more stores without needing more staff
BEIJING — Yum China is spending more on tech, an investment that's allowed it to open more stores without having to hire more staff, CEO Joey Wat told CNBC in an interview Friday.
Yum China operates KFC and Pizza Hut stores in China, among other brands. Its U.S.-listed shares rose by 5.45% Thursday after the company increased its net new stores target for the year by 300 — and plans to return $3 billion to shareholders over the next three years.
«From 2016 to now we increased our number of stores by about 80%. However, our number of staff almost stayed flat [around] 430,000 people,» Wat said via video conference.
With technology, she said staff can be promoted to manage multiple stores and support the opening of new locations.
Yum China said Thursday it plans to invest $3.5 billion to $5 billion over the next three years to grow its store network, improve its supply chain and boost digital capabilities. This year alone, the company plans to spend about $700 million to $900 million.
Wat said the company began to invest in technology during the Covid-19 pandemic to improve visibility into its supply chain and inventory levels in a period when certain stores might need to close due to lockdown controls.
Companies from Alibaba to Walmart's Sam's Club have been using software to manage warehouses and supermarket inventory in China — to sell services such as one-hour grocery delivery.
Yum China is building more of its own logistics centers where it can integrate more technology into its supply chain and reduce carbon emissions, Wat said, noting the company ultimately aims to own 30% of its logistics centers rather than having to rent them.
As a result, store managers don't have to order inventory anymore — ingredients are
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