Some Fast Food Isn't Fast Enough for Chinese Consumers

KFC—that genteel bastion of colonel-sponsored, breaded-and-fried poultry goodness—entered the Chinese market in the late 1980s with a bang. It was the first Western fast-food company to do business in China and it was so successful—at least initially—that Harvard Business School students were forced to study its finger-lickin' ways. But things have been quickly careening southward for the chicken chain in China. And Richard Macauley, a reporter for Quartz who is based in China, is pretty sure he knows why.

He says KFC China forgot that it's supposed to be serving fast food—and instead, its food is being served really, really slowly.

Macauley describes going to a KFC outlet in the southwest city of Chongqing recently with a couple of friends. They were asked to be seated after they ordered. They then proceeded to wait more than ten minutes for their food to be prepared. The kitchen didn't have anything ready—not even the chain favorites—when they had arrived. In short, KFC China is no longer acting like a fast-food joint.

"Over the five years I've visited KFC during lunch time … when the lines could be as much as ten people deep … I'm often asked to take a seat because standard menu items—like two pieces of original recipe chicken—will need to be cooked from scratch. It's not uncommon, in my experience, to find that around half the menu is entirely unavailable," Macauley says.

The problem is negatively impacting KFC's results in China. Last week, the share price of KFC's parent company, Yum, significantly dropped. Third-quarter, same-store sales for KFC China were stagnant and Yum cut its 2015 earnings forecast, reducing its market capitalization by billions of dollars.

Macauley says he knows why. He explains: "From my personal observation, KFC's real problem in China is something more fundamental—they're making slow food, not fast food."

It's not as though KFC China doesn't have other problems besides lethargy. Things have certainly changed from the days when Harvard was lauding its business practices. Recently, KFC China was found to be serving ice cubes that were dirtier than toilet water. If that's not enough for you, they were also feeding customers meat past its expiration date. Oh yeah, also this: they were using illegal drugs to fatten their chickens.

So things haven't been great, press-wise, for KFC China. The avian flu scare also put a damper on chicken chomping.

But here's the thing: the dirty ice and expired food problems have plagued other food chains in China and not brought them down. Yup: McDonalds in China was also found to be serving filthy ice cubes and outdated meat. So why has KFC—which is China's largest restaurant chain with over 4,500 outlets there—done so badly of late?

Maybe it's because a fast-food chain that is not serving its food fast enough.

Business analysts like Howard Penney of Hedgeye Risk Management are seriously concerned. After learning about Yum Brands' shocking third-quarter results he has called for action: "Spin off China, sell stores, do something," he told Reuters.

Maybe that "something" is simple: KFC should start selling food that comes out the way it should: really, really fast. Here's to hoping the Colonel doesn't come down with a case of the vapors that leaves his ambitions for the Middle Kingdom permanently in shambles.