Fast food venues use holidays to increase business, profits

By Li Luxia

Eagle-eyed customers may have discovered that the price of certain KFC products has been increased by 5 jiao (US$0.06) to 1 yuan (US$0.125). Pizza Hut, another chain restaurant under Yum! Brands Inc, has raised its pizza prices by 3 yuan (US$0.375). McDonald's, KFC's largest competitor in the fast food market, has adopted a promotional strategy to lure customers from its old rival. Starbucks, well-known coffee chains, has also joined the group of "price hikers," with an increase of 2 to 3 yuan (US$0.375) per cup.

As the Spring Festival draws near, more and more foreign fast food restaurants are trying out new promotions in order to keep their share of the lucrative run up to the Chinese New Year.

In the KFC on Central Huaihai Road, throngs of workers, shoppers and tourists swarm the restaurant during the lunch hour, ordering chicken and burgers. Customers seem unconcerned about the price hikes.

"(The increase of) 5 jiao can be ignored," said Zhou Li, a university student who bought a hamburger and cola for lunch. "The atmosphere here is cozy and pleasant, so I'm not worried about the new price."

Her sentiments were echoed by Shen Jiaming, also a university student: "The new price is hardly any different from the former one. Since I have several coupons for KFC, I come here regularly." She added: "Even if I didn't have coupons, I would choose KFC, which is clean and convenient."

The nearby McDonald's is also jammed with customers. A red poster announcing promotional information stands out prominently.

"All customers who spend more than 18 yuan (US$2.25) will get a red envelope, in which you can get an additional free snack or up to 2,006 yuan (US$250.75) in cash," announced the waitress.

Dozens of middle school students who are not loyal to specific restaurants are lured by the promotion, and want to try their luck with the red envelope.

According to Qiang Yongchang, deputy president of the School of Economics, Fudan University, KFC's recent price hike is just a marketing ploy, which takes advantage of its brand reputation to yield extra benefits. However, Qiong holds the view that McDonald's promotion method may be more effective, because a large number of consumers who are sensible to price will be attracted to McDonald's restaurants.