Yum Brands CFO: Digital ordering channels grow top line and profits
Pat Grismer, Yum Brands' CFO, spoke this morning at Barclay's Retail and Consumer Discretionary Conference, covering topics such as the importance of providing a "healthy and indulgent" menu balance and the company's ramped-up focus on digital channels in every global market.
"Digital is an enormous priority everywhere, not just in China," he said.
It is, however, the company's China market that has paved the standard for digital objectives. In the country, Yum has online ordering capabilities for both its Pizza Hut Delivery business and its growing KFC Delivery business.
Grismer said sales coming through digital channels in the market are between 70 and 80 percent. Of that number, 25 to 30 percent come from mobile, which is up from about 10 percent this time last year.
"We've put significant resources behind it. We believe [digital ordering channels] both grow top line sales and improve profitability for a number of reasons — including savings on labor and increase in average spend," he said. "When consumers are in complete control of their ordering process, they tend to spend more."
Grismer said the company is in the process of rolling out mobile ordering for KFC and is testing the service in a few markets before taking it national. Domestically, the company also continues to test mobile ordering for Taco Bell. The platform is expected to roll out later this year.
"We're excited about the design, how differentiated it will be, how fantastic it will be from a customer experience standpoint and how we're going to weave it into a customer loyalty program," Grismer said.
Healthier offerings 'don't mix high'
Grismer was also asked how the company is responding to increased demands for healthier options. He said while Yum's brands have introduced more healthful alternatives, they haven't mixed high.
"We've found that consumers come to our brand because they appreciate the taste and indulgence," he said. "But we need to continue to maintain high standards and provide more balanced offerings and give customers a choice. We're taking steps to evolve the menu in ways that are responsive to that."
Alicia Kelso / Alicia has been a professional journalist for 15 years. Her work with FastCasual.com, QSRweb.com and PizzaMarketplace.com has been featured in publications around the world, including NPR, Good Morning America, Voice of Russia radio, Consumerist.com and Franchise Asia magazine.