Yum China, the operator of KFC and Pizza Hut in China, has set out plans to accelerate store openings and lift profitability with an emphasis on lower-tier cities.
KFC aims to grow its China estate by one-third to exceed 17,000 outlets by 2028, and expects operating profit for the brand to top 10bn yuan ($1.41bn).
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The brand will rely on flexible store formats and an accelerated franchise model to extend reach into more than 2,000 lower-tier cities and additional strategic channels.
The expansion of Pizza Hut is also planned.
From a base of 4,000 stores, the company plans to add more than 600 net new Pizza Hut restaurants each year up to 2028.
To enter lower-tier cities, the company aims to utilise a lower capital-expenditure and a streamlined operating model.
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By GlobalDataYum China expects Pizza Hut’s operating profit in China to double between 2024 and 2029 and aims to increase the total Pizza Hut locations to more than 6,000.
Technology and supply-chain initiatives will form part of Yum China’s strategy.
The company plans for the advancement of agentic AI capabilities to support system-human interaction, multi-agent coordination and data-driven decision-making.
Where appropriate, Yum China will also work with suppliers to build integrated supply-chain parks to enhance operational synergies.
Yum China CEO Joey Wat stated: “As a result, despite our significant scale, store expansion is accelerating. It took us 33 years to reach our first 10,000 stores, and we now aim to double that in just six years by 2026 and exceed 30,000 stores within the following four years by 2030.
“Our innovative and flexible store formats, together with a hybrid model of both equity stores and franchise stores, will enable deeper and faster market penetration.”
For the full year 2025, Yum China has set targets for restaurant margin of between 16.2% and 16.3% for the group, around 17.3% for KFC and 12.7% for Pizza Hut, and free cash flow per share of $2.20 to $2.30.
By 2028, the company’s goals include more than 25,000 total stores and a group restaurant margin of at least 16.7% for Yum China, with KFC margin at least 17.3% and Pizza Hut margin at least 14.5%.
In early November 2025, Yum! Brands, Yum China’s US-listed parent, announced it is conducting a strategic review of its Pizza Hut business.
Pizza Hut was the only division to record a same-store sales decline in the quarter ended 30 September 2025. The chain’s same-store sales dipped 1% during the third quarter, driven by a 6% fall in the US.
