Thursday, May 28, 2015

Who's better: Kentucky Fried or Chick-fil-A?

Chick-fil-A will be bigger than KFC if trends continue, says analyst Mark Kalinowski

Who's better: Kentucky Fried or Chick-fil-A?

"KFC - which has held the number-one market share within the quick-service chicken segment for decades - will eventually lose the top slot to privately-held Chick-fil-A," writes analyst Mark Kalinowski of Janney Montgomery Scott in a report to clients today.

He still recommends KFC-Taco Bell-Pizza Hut owner Yum Brands to investors, "based in part on meaningful growth opportunities outside of the United States, most notably China"; but he notes "unfavorable marketshare trends" for all three of Yum's major brands within the U.S.

Chick-fil-A could take a decade or more to pass KFC based on sales trends. That "would be a remarkable changing of the guard," since less than a decade ago KFC was still four times larger. But Chick-fil-A offers "superior" operations (including faster service according to industry bible QSR), a focused marketing campaign ("Eat Mor Chikin") that KFS lacks, and rising same-store sales (4% this recessionary year).

Plus - while KFC is everywhere - Chick-fil-A has room to grow, with no presence in 12 states and little in some big states like Illinois.

Who has the best fast-food chicken?
Chicken from a burger chain
Not a fast-food poultry fan
About this blog

PhillyDeals posts drafts, transcripts and updates of Joseph N. DiStefano's columns and stories about Philly-area business, which he's been writing since 1989.

DiStefano studied economics, history and a little engineering at Penn and taught writing at St. Joseph's. He has written thousands of columns and articles for the Inquirer, Bloomberg and other media, wrote the book Comcasted, and raised six children with his wife, who is a saint.

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Joseph N. DiStefano