KFC Corp. is testing milkshakes, grilled chicken and late-night hours at its U.S. restaurants as part of a move to boost domestic sales.
The fast-food chain’s traditional chicken-on-the-bone offerings — Original Recipe and Extra Crispy — are both fried. Laurie Schalow, a company spokeswoman, said the grilled menu items will appeal to women, health-conscious consumers and anyone else who wants an alternative to fried chicken.
“It’s just giving consumers more options,” she said yesterday in an interview.
David Novak, chief executive at KFC parent Yum! Brands Inc., said in a conference call yesterday that the company’s U.S. restaurants could bring in as much as $300,000 more in annual sales if they took steps such as adding menu items and staying open longer. The company’s Taco Bell chain continues to tinker with a breakfast menu, and Novak said KFC restaurants in select markets will stay open later into the evening as the year progresses.
While Novak described the company’s 20,000 domestic restaurants as a “tremendous opportunity” yesterday, Yum’s overseas portfolio has been the bright spot in recent months. First-quarter profit in the China division soared 31 percent, and profit in other international markets rose 25 percent.
The company raised its full-year forecast late Tuesday after announcing quarterly results, and Yum’s stock briefly topped $68 a share in trading yesterday before closing at $66.73, an all-time high and up 5.7 percent for the day.
Novak said the company now has restaurants in 402 cities in mainland China, where it sponsors a three-on-three basketball tournament that draws 180,000 players. He said Yum also is looking to expand its Chinese-themed East Dawning restaurant concept ahead of a planned advertising campaign on regional television in Shanghai.
Quarterly profit in the United States declined 11 percent for the period ended March 24, but Novak predicted a “tale of two cities” for the domestic business in 2007, with a strong second half offsetting weaker results in the first two quarters. It was unclear yesterday whether the planned changes at KFC will become part of a national rollout. Schalow said the late-night hours have been tested in New York City, and will be expanded to other markets. Most KFC stores now stay open until 10 p.m., she said. Stores that stay open until midnight or later will offer a trimmed-down menu, and drive-through service only during the late hours.
In yesterday’s conference call, Novak described the milkshakes as part of an effort to create “destination” drinks and desserts at Yum restaurants, which also include Pizza Hut, Long John Silver’s and A&W All American Food. He said the company also is “aggressively developing” a line of Mexican-themed drinks at Taco Bell.
The KFC shakes, called Avalanche, cost $1.99 and come in two flavors: Old Fashioned Vanilla and Chocolate Dream. Schalow said they are being tested at select stores, including the KFCs at 4812 Outer Loop and at 12206 Shelbyville Road.
KFC already offers a line of roast chicken, and the company frequently plays with new and existing menu items. It launched cold chicken in 1997, four years after spending $100 million on a line of roasted chicken called Colonel’s Rotisserie Gold. The rotisserie line is no longer offered. A menu line called Skinfree Chicken also flopped.
Schalow said the grilled chicken will require new equipment at restaurants — notably a grill — but she declined to disclose the cost per store. A decision about a national rollout will most likely be made by the end of this year, she said. Tests started late last year, and the product is now being sold in Austin, Texas; San Diego; Jacksonville, Fla.; and Colorado Springs, Colo.
Schalow said feedback from customers so far has been “very favorable.”