Fri 6th Sep 2013 - Breaking News - KFC shames Starbucks with £25m two year tax contribution Kentucky Fried Chicken reports turnover up, profit down in the UK: Kentucky Fried Chicken, which is owned by US-based Yum Brands, has reported turnover rose to £423,345,000 in the UK in the year to 2 December 2012, up from £394,244,000 in the year before. Operating profit dropped to £42,913,000 from £50,127,000. Pre-tax profit also dropped to £39,137,000 from £47,232,000 the year before. The company paid £13,742,000 in tax in 2012 and £11,365,000 the year before – critics of Starbucks will contrast the £25m paid over two years by KFC to the low levels of tax paid historically by the fellow American-owned company. The company stated: “Against the tough macro economic climate we have continued to develop our new products and new sales layers including non-fried, whilst strong advertising and continuing investment in enhancing and maintaining our restaurant estate have helped deliver a 7.1% increase in sales. Despite the global increase in food commodity prices the company saw a decrease in cost of sales to 51.5% (2011: 52.3%). However, the business has increased administrative expenses by £22.4m to £165.6m (2011: £143.2m) as a result we have delivered operating profit of £42.9m (2011: £50.1m). Of the company’s earnings, £388,347,000 comes from company-run sites with £34,998,00 derived from franchised sites. Franchised earnings rose by £1.4m compared to the year before while company sites saw a £28m rise in turnover a new sites opened. At the start of 2013, KFC introduced freshly ground Lavazza coffee as it aims to broaden its appeal and take on coffee chains and fast food rival McDonald’s in the growing coffee market. The fast food chain is sell the premium coffee for £1.29, which it claims makes it the “best value” freshly ground coffee available. KFC also introduced a loyalty scheme, which offers customers a free cup of coffee for every three purchased to encourage regular purchases. The campaign was launched yesterday (15 April). Speaking to Marketing Week, Jennelle Tilling, KFC UK vice president of marketing, said KFC is taking steps to encourage consumers, particularly women, to reappraise the brand and consider it for occasions beyond dinner time. As part of this strategy, it is refurbishing its store portfolio and introducing new ranges. It has introduced a new desert range. The chain has also introduced a breakfast menu in a number of UK restaurants and is rolling it out across Scotland.