Tuesday, May 1, 2007

Rats at restaurants don't hurt chains' profits

See the New York Times article at http://www.nytimes.com/2007/05/02/business/worldbusiness/02yum.html?_r=1&ref=business&oref=slogin
Here are the first paragraphs:
''Despite back-to-back public relations disasters — first an E. coli outbreak at its Taco Bell franchise, and then a widely publicized rat infestation at one of its restaurants in New York City — Yum Brands yesterday reported strong first-quarter earnings, as surging overseas sales and growth offset reduced business in the United States.
The restaurant chain, which operates KFC, Taco Bell and Pizza Hut, said that net income increased 14 percent in the first quarter, to $194 million, led by a 31 percent increase in operating profit in the China division and a 25 percent increase in other overseas markets.
In the United States, the story was different. Operating profit at the company’s domestic restaurants declined by 11 percent in the quarter as company officials battled to restore consumer confidence. At Taco Bell, where both the E. coli and rat incidents occurred, same-store sales declined by 11 percent.''

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