Has KFC had its chips?

THE CHIPS WERE DOWN at Kentucky Friend Chicken (KFC) outlets across the UK yesterday – but it wasn’t the fault of their potatoes. Over 450 KFC outlets were closed for business as they couldn’t get any chicken.

Thousands of disgruntled customers expressed their disappointment on social media – but worse may yet be to come as KFC could not say when the delivery problems that robbed customers of their chicken would be solved.

KFC has fresh chicken delivered to its outlets every day. Until last week, the deliveries were done by a company called Bidvest – a South African-owned company which specialises in food distribution. KFC recently changed its supplier to DHL, who took over the job of getting chicken to where it was needed last week. DHL is a well known general distribution group, but just a week into the job they seem to have lost control.

KFC issued a statement indicating that the failure was just teething problems. However, Bidvest used a dedicated software system to establish what supplies were needed in each store and then to get the right bits to the right places. There are suggestions that DHL’s more generalist systems, which focus more on getting goods round the world than on the dual task of stock-taking and ordering followed by delivery, are not up to the job.

For its part, DHL blamed “operational issues”. It pointed out that it wasn’t a case of chicken not getting through at all – deliveries were either delayed or incomplete rather than absent. However, KFC took its own operational decision – that if an outlet could not offer the full KFC menu, it would not open. In the fast food industry, delay and partial success are not good enough.

As KFC entered a second day of the supply problem, this time with over 500 of its stores unable to open, there were reported to be boxes of chicken piling up at DHL’s depot in Rugby – the single depot from which it intended to supply KFC outlets across the UK. With the poultry not able to leave the warehouse, there were reports it would have to be discarded. Commentators were estimating that KFC was losing £1 million a day in short term losses alone.

It wasn’t just the customers who were suffering. It was not clear what would happen to staff who turned up to work, only to find their outlet was shut. KFC owns only one in five of the outlets that sell its food: the others are franchises. KFC indicated that it would pay its salaried staff as usual and would pay hourly-paid staff an average of their daily earnings over the last three months. The company urged franchisees to do the same – but there was no guarantee that they would do so.

The GMB union, which recruits KFC workers, said that it had warned KFC that ending its relationship with Bidvest and taking on DHL was a false economy. The union was cross because the switch led to a Bidvest depot closing and the loss of 255 jobs overall. Now it seems that the change may cause further difficulties for KFC workers too.

The restaurant sector is not buoyant at the moment, and KFC will be hoping to hatch up a solution to these delivery problems before regular customers are lured away by alternative fast food outlets.

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