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Retail Wednesday 22nd April 2015

An old friend gets a new look

An old friend gets a new look

KFC is celebrating its 50th year in the UK, but the chain whose famous secret recipe brought finger-lickin’ good chicken to these shores is not resting on its laurels…

From its first store in 1955, KFC has built a chain of more than 870 outlets throughout the UK and Ireland and employs more than 24,000 people.

Despite being in this country for half a century, the company is still expanding and has identified a further 400 locations where it wants outlets and hopes to tick those acquisitions off at a rate of 30 to 40 per year.

That sounds a bit ambitious until you realise that, globally, KFC has nearly 20,000 stores in 117 countries and serves eight million customers a day.

KFC – formerly Kentucky Fried Chicken – is now part of the Yum! Brands group which also includes Pizza Hut and Taco Bell. KFC’s origins are in Kentucky where it really was created by Harland Sanders who was a real-life colonel, albeit an honorary one who had been nominated by the state’s governor.

Its UK acquisition programme is not only ambitious but it is specific, particularly from a property-perspective. The 12-page list of property requirements can be downloaded from the KFC development website (www.kfcdevelopment.co.uk) and reveals, for example, that not only does the company want three sites in Cambridge, but that one of them should be in Lion Yard or the Grafton Centre. Two outlets are wanted in Chelmsford, four in Leicester, seven in Nottingham and 10 in Glasgow. The list also reveals that about 90% of KFC’s desired developments are drive-thrus.

Senior Acquisitions Manager Dan Gardner, who is concentrating on sourcing KFC’s desired properties within London, said: “We are focusing quite heavily on drive-thru growth and urban stores in Glasgow, Manchester, Liverpool, Birmingham and London. I am specifically searching inside the M25 for sites, as well as our urban concept for Central London. We believe there’s lots of capacity inside the M25. It’s a challenging, difficult acquisition trail to follow however our search is focused on finding sites in locations where we have customer demand.

The idea is to encourage people to dwell in our stores and to enjoy the environment and share freshly made food

“I believe we have substantial capacity to operate at least another 50 drive-thru stores within Greater London and even more with our new urban concept.”

KFC has four core formats: traditional restaurants, food courts that provide KFC with a presence in shopping centres where seating is shared with other brands, smaller express stores and drive-thrus. In addition to the above, KFC are also working on a new urban concept: “We’re looking for stores in urban areas and transport hubs. So that covers everything from restaurants to what we call express stores and we’re looking at a number of other concepts too,” says Gardner.

“We’re working on finding new urban units that are convenient for our customers in urban environments. Part of my role is to try and find suitable sites for us in London, including central London, where we feel there’s a strong demand from the urban commuter, office-worker and retail customer base. Basically customers who are hungry and short of time.”

The fresh approach to restaurant design is vividly demonstrated by the new store in Bracknell, which has a much warmer, retro and health-conscious feel than typical fast food outlets. The emphasis is on showing how the food is prepared on the premises and explaining how ingredients are sourced.

It is a long way from the simple red-and-white livery that characterised the chain for most of the past five decades.

Gardner is enthused by the opportunity: “We have a rolling product development programme and we’re trying to be dynamic and fluid in terms of how our stores look and feel. Our new design is based around how families and friends come together around the kitchen table to eat. The idea is to encourage people to dwell in our stores and to enjoy the environment and share freshly made food.

“We’ve set upon a design which we really like and we’re comfortable with and it’s something that we’d like to get into as many of our stores as possible, as quickly as possible.”

For most of his 18-year career, Gardner has been connected with the restaurant business and he came to KFC from coffee chain Starbucks only six months ago. Despite his relatively brief tenure, he is passionate about KFC and its latent potential: “The main reason why I’ve come across to KFC is that I do honestly believe there is much more potential in the business. For instance, when you look at demand for breakfast and coffee, there’s a lot of growth that we haven’t realised yet.

“Our new premium coffee offer and sweet treats, like muffins and cookies, are strengthening our appeal and improving convenience for our customers.”

Although KFC is fairly definite about what it wants, Gardner stresses that he and his colleagues take a pragmatic approach to filtering new propositions:

“We don’t want to be too prescriptive in saying ‘it’s got to be this and this alone’. We’re really keen to challenge ourselves to look at all sorts of opportunities, even if they fall outside the parameters of where and what we’ve asked for on our requirements list. We will inevitably get sent things that aren’t quite right for us, but we need to consider them like every other proposal.”

KFC’s expansion, since the days of Colonel Sanders, has always consisted of franchising and in the UK around 75% of the KFC portfolio is operated by its franchisee population which strengthens and supports KFC’s expansion plans.

Gardner comments: “We work very closely with them to get the best asset for our customers. We operate what we call a ‘one-system business’. We see the franchisees and the businesses that they run with us as very much part of our wider business.

“KFC is set up in a way so that everybody works together, whether it’s HR, marketing, development, or any other part of the business, we’re all working hand in hand. The franchisees do the vast majority of the work when it comes to finding and opening new franchised sites and they are supported by the experts in the franchise development team, who are there to help them along the way.”

The property development support emanates from KFC UK’s headquarters in Woking, Berkshire, where the experienced 10-strong property acquisition team is notionally based – much of their time is inevitably spent on the road.

The company is committed to making working for KFC a worthwhile and progressive experience. It has won a clutch of Great Place to Work and Top Employer awards during the past few years.

Gardner reports: “We have around 45-60 team members in an average store, and so it’s very important to train them and develop them. We provide a number of apprenticeships – advanced NVQs – and typically put around 3,000 people through the course each year.

I believe we have substantial capacity to operate at least another 50 drive-thru stores within Greater London and even more with our new urban concept

“And we’ve introduced a business management degree through De Montfort University that our managers can participate in”.

It turns out that the final vital ingredient in the KFC secret recipe is actually customer service.