China Flag There was an interesting dispatch from Adam Jourdan of Reuters on Monday November 28 concerning the rise of Chinese fast food chains and their potential impact on the USA giants, KFC and McDonald’s. McDonald’s announced it is thinking of slowing expansion in the country and KFC still shows weak sales from several food safety scares last year. Is this just a weakening economy or a combination of all the above? Most likely the latter explanation.

I have written on this blog before and have mentioned on Bloomberg TV several times that Chinese QSR chains are getting better all the time and will take a bite out of McDonald’s and KFC. It is inevitable. Is it really a shocking discovery that Chinese people really like Chinese food better than Western food?

Other than competitive market dynamics, I believe that the biggest threat to the USA QSR concepts is the perception held by Chinese consumers that Chinese food is just “healthier and better for you” than American food and these consumers may very well be right!

Yes KFC and McDonald’s will continue to grow and prosper but they now have some competition to worry about which is a good thing for the Chinese consumer and they cannot just grow market share with clean bathrooms and air conditioning!