Yum! Brands, Inc. (YUM) remains intent on expanding its KFC brand in the emerging markets. Consistent with this objective, the Louisville-based restaurateur launched the brand in Bolivia under a franchisee deal with Delosur.
The new restaurant, located in Santa Cruz’s Ventura Mall, offers signature KFC items like Crispy chicken, Hot Wings, the Original Recipe sandwich and Twisters to name a few. The restaurant features a modern design and seats more than 200 guests. Delosur plans to open another KFC outlet in Santa Cruz later this summer.
Of late, Bolivia is gaining popularity which was solely enjoyed by its neighbors Argentina and Brazil earlier. In fact, Santa Cruz, the most populous city in Bolivia, is one of the fastest growing cities in the world. The city has been Bolivia’s economic center since the beginning of the 20th century as well as its most affluent city. With higher disposable income, Santa Cruz has also become the trade capital of the country. We believe this has prompted Yum! Brands to bring the KFC brand to Santa Cruz and tap into its developing economy.
Quick service restaurants like McDonald's Corp. (MCD) are currently focusing on emerging cities with high growth potential. The intense competition in developed economies such as the U.S. and the U.K. has prompted these companies to look to the emerging markets to boost revenues and earnings growth.
Yum! Brands currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same sector include Chipotle Mexican Grill, Inc. (CMG) and Carrols Restaurant Group, Inc. (TAST). Both these stocks sport a Zacks Rank #2 (Buy).
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