Tue, Jun 28, 2005 - Page 11 News List

Burger King debuts in China, aiming to catch rivals

BLOOMBERG

Burger King Corp, the second-largest US hamburger chain, plans to open 10 stores in China in 12 months, aiming to catch up with McDonald's Corp and Yum! Brands Inc in the world's fastest-growing major economy.

"China is huge and could be one of the most important markets for Burger King in the next five years," chief executive Greg Brenneman said in Shanghai, where China's first Burger King opened yesterday in the nation's biggest commercial city.

Burger King says there is still potential in China's fast-food market, which the China Cuisine Association estimates is worth 120 billion yuan (US$14.5 billion). McDonald's, which has 666 restaurants in about 100 Chinese cities, plans to add at least 100 a year in the country.

Yum, operator of Taco Bell, Pizza Hut and KFC, had 1,758 KFC outlets and 261 Pizza Huts in China in March and plans to add 300 restaurants a year.

"It's still early days for the market in China," said Steve DeSutter, president of Europe, Middle East, Africa and Asia-Pacific for Burger King.

"The Chinese market has grown and has demonstrated a demand for Western fast food. We think it's a big and ready-made market for Burger King," he said.

Burger King, based in Miami, is entering China 18 years after Louisville, Kentucky-based Yum and 15 years after Oak Brook, Illinois-based McDonald's.

The first 10 Burger Kings, known for flame-broiled Whopper burgers and onion rings, to open in Shanghai and nearby cities in the 12-month span will be wholly owned by the company, Brenneman said, declining to give investment figures.

After the first year of operations, Burger King plans to move into franchising, DeSutter said.

Burger King's menu in China will be customized for local tastes, Brenneman said. The store will offer a Whopper burger using spicy sauce from the southwestern province of Sichuan for 10.5 yuan (US$1.27) and spicy chicken wings, in addition to its basic Whopper and onion rings.

Number of outlets in China

* KFC: 1,758

* McDonald's: 666

* Pizza Hut: 261

* Burger King: 1

Source: Bloomberg


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