FAST NEWS: Yum China steps up Children’s Day promotions to capture rebounding demand

The Latest: Yum China Holdings Inc.’s (YUMC.US; 9987.HK) core KFC restaurant chain was aiming to sell nearly 3 million toy sets as part of its Children’s Day promotions this year, up about 25% from the 2.4 million it prepared for the same period last year, according to KFC promotional posters seen by Bamboo Works on Friday.

Looking Up: Yum China is one of many restaurant operators aiming to cater to strongly rebounding demand as the nation recovers after three years of Covid restrictions that caused frequent business disruptions and dampened consumer sentiment.

Take Note: Recent signals from some companies have shown an initial wave of “revenge spending” by Chinese consumers since the start of this year may be losing momentum, especially for more expensive items like cars and home appliances.

Digging Deeper: Children’s Day is observed on June 1 each year, and is one of the first major festive holidays in China this year. It comes a month after the similarly festive but longer five-day May 1 holiday, which saw China’s tourism revenue rise 129% to 148 billion yuan ($21 billion) as spending topped pre-pandemic levels. Companies like Yum China, which operates the KFC and Pizza Hut chains in China, have moved aggressively to capture the strong demand with various promotions, often centered on holidays. Yum China’s more than 9,000 KFC stores nationwide prepared 2.83 million sets of toys based on themes from Japan’s Sanrio for this year’s Children’s Day promotions, which run from May 20 to June 4. It also prepared another 130,000 sets based on the Gudetama line of children-themed suitcases.

Market Reaction: Yum China’s Hong Kong-listed shares rose 3.7% in Friday trade in Hong Kong. The stock now trades near the upper end of its 52-week range.

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Reporting by Doug Young