The owner of KFC and Pizza Hut said sales plummeted 20% in the first two weeks of March as a wave of new Covid cases spread across China.
Yum China said “the situation has deteriorated rapidly” as regional lockdowns were put in place to contain the outbreak.
More than 1,100 of its stores are temporarily closed or offering takeout and sales are “still on the downtrend”.
China’s lockdowns are among the biggest since the pandemic began.
These include Jilin province – home to companies including automakers Toyota and Volkswagen – as well as the tech hub of Shenzhen, as the number of new infections of the Omicron variant of Covid has surpassed 5,000 cases.
Yum China said, “In early March, the situation rapidly deteriorated as the highly transmissible Omicron variant caused outbreaks across China, including the economically important regions of Guangdong, Shanghai, Shandong and Jilin.”
It added: “Our operations have been significantly impacted by the recent outbreaks and tightening public health measures, which have led to a further reduction in social activities, travel and consumption.”
Toyota, Volkswagen and iPhone maker Foxconn have been forced to suspend operations in affected regions due to lockdowns.
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There are concerns that the restrictions could impact global supply chains.
However, Joey Wat, CEO of Yum China, said, “Our robust supply chain management has protected us from major business disruptions.”
The company said it more than doubled the number of stores it closed or limited to takeaway services from 500 in January to 1,100 in March.
Mr Wat promised: “We will keep our restaurants open and provide food services to our customers wherever possible and safe.”
All 24 million residents of the northeastern province of Jilin were quarantined on Monday. People are not allowed to move and anyone who wants to leave the province has to apply for a police permit.
About 12.5 million people living in Shenzhen — China’s so-called Silicon Valley — are also living under a five-day lockdown.
Businesses in many of the affected regions have closed or are allowing their employees to work from home.
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