More KFC stores will open along Shanghai's 11 Metro lines over the next five years after the fast-food chain store signed an agreement with the city's rail operator yesterday.
By forming the strategic partnership with the Shanghai Shentong Metro Assets Management Co Ltd, Kentucky Fried Chicken Corp will continue its rapid expansion during a time when fast-food retailers face difficulties in finding ideal locations in the maturing city market.
"Shentong will be a key partner for KFC in the coming years," said Lu Jiulong, chairman of Shanghai KFC Co Ltd, KFC's venture with Jin Jiang International Group. "We plan to double the number of stores along the metro lines during the five-year contract."
Louisville-based KFC started opening stores along Metro lines in 2003 and had 12 stores along the existing five Metro lines by last year.
Although it's not an exclusive agreement in the catering industry for the development of Metro lines, KFC is still expected to get preferential rent and priority among other competitors, according to Jammy Liu, general manager of Shanghai KFC.
KFC, run by Yum! Brands Inc, is celebrating its 20-year anniversary in China, where people's rising income led to an increase in dining out and attracted other fast-food chains such as McDonald's Corp and Burger King Holdings.
KFC has 1,800 outlets in China and is increasing by 300 more every year, almost double the number of McDonald's outlets across the country.
It still tied up with big retailers such as B&Q and Carrefour SA to open more stores as McDonald's, which has focused on developing drive-through restaurants in China, is catching up quickly.
He Yizhao, chairman of the Shanghai Restaurants Association, said the cooperation will bring more efficiency for KFC to open its stores. "It will become a trend among the catering industry as they can benefit from the huge flow of people (on public transport)."
Shentong will run 11 Metro lines by 2010 with 284 stations, which will handle 3.5 million people every day.
The first store under the cooperation agreement, opened near the Metro 1 Line at Jin Jiang Park Station yesterday, is its 200th outlet in the city.