Emily Carter
KFC has been facing a crisis with several of its outlets shutting down across the world. In 2018, KFC ran out of chicken and had to shut down hundreds of restaurants across the UK and Ireland. The issue was blamed on a new delivery partner, DHL, which failed to deliver ingredients to KFC's restaurants. The company apologised for the inconvenience and assured customers that they were working flat out to resolve the crisis. In 2024, KFC faced another setback when 13 of its restaurants in the UK and over 100 in Malaysia shut down. While the reason for the closures in the UK was attributed to franchising issues, the closures in Malaysia were dubbed as temporary. However, experts believe that KFC is struggling to keep up with the competition and changing consumer preferences, which is impacting its business.
| Characteristics | Values |
|---|---|
| KFC shutting down due to lack of chicken | KFC temporarily closed hundreds of restaurants in 2018 due to a chicken shortage. |
| Reason for shortage | KFC switched to a new delivery partner, DHL, which had operational issues and used a single depot. |
| Impact on business | KFC's public image and customer confidence were affected. |
| Customer reaction | Customers expressed frustration and opted for rival fast-food outlets. |
| KFC's response | KFC issued an apology and worked to resolve the issue. |
| Recent closures | KFC has faced recent closures in the UK, Malaysia, and the US due to various issues, including franchising and failure to keep up with the market. |
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What You'll Learn
KFC's new delivery partner, DHL, caused logistical issues
In 2018, KFC switched its delivery partner to DHL, which caused logistical issues that led to a chicken shortage and, consequently, the closure of hundreds of KFC restaurants.
KFC's new delivery partner, DHL, had just one depot in Rugby, whereas the previous contract holder, Bidvest, had six. This meant that serving KFC's 900 restaurants across the UK and Ireland from a single warehouse was an incredibly complex task. The fact that it was a new warehouse with a new IT system, and that the handover had only just occurred, contributed to the issues.
DHL admitted that a number of deliveries had been incomplete or delayed due to operational issues, but stated that they were not the only party responsible for the supply chain to KFC. The German company was put under intense scrutiny for its failure to deliver KFC's ingredients, with some blaming the decision to use a single depot.
The chicken shortage began on February 16, 2018, and by February 18, only 266 out of 870 restaurants in the UK and Ireland were open. KFC published a list of 338 stores that remained open out of a total of 900, with many offering a limited menu and restricted opening hours. The company said it would pay its staff as normal and encouraged franchisees to do the same.
The logistical issues caused by KFC's new delivery partner, DHL, resulted in a significant disruption to the fast-food chain's operations, leading to restaurant closures and impacting public confidence in the brand.
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KFC's single depot and warehouse model
KFC's decision to switch to a single depot and warehouse model, managed by their new logistics partner DHL, in February 2018, led to a chicken shortage crisis. The new warehouse was located in Rugby, and the handover to DHL was still in progress.
Experts have debated the causes, but the general consensus is that the reliance on a single warehouse for nationwide distribution and a lack of contingency planning are to blame. The previous contract holder, Bidvest, had six warehouses. DHL's delivery lorries got stuck in traffic as they left the depot, and with no other sites to dispatch from, the delays that led to the chicken shortage began.
The single depot model is a complex task, and the new IT system, coupled with the new warehouse and the handover, created a perfect storm. The specialised nature of KFC's menu and the single warehouse model meant the problem was quickly noticed by customers.
The on-demand warehouse model could have prevented the issue, as it allows retailers to activate distribution hubs near customer demand and switch them off if demand dries up. This distributed model removes the single source of failure issue.
The single depot model also raised questions about sustainability and food waste. There were reports of entire lorries of chicken spoiling in the depot, as drivers were kept waiting for hours to enter, leading to further food waste.
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KFC's decline in quality and service standards
KFC has been experiencing a decline in quality and service standards, which has resulted in a struggle to keep its doors open. The fast-food chain has faced multiple issues, including a notable decline in customer service, a failure to keep up with the times, and a lack of chicken due to supply chain disruptions.
In 2018, KFC was thrust into the spotlight as a chicken restaurant that had run out of chicken. This was due to a "single point-of-failure" in its supply chain and a lack of contingency planning. The company had recently switched to a new delivery partner, DHL, which used a single warehouse instead of the previous six. This transition, coupled with a vehicle collision on the M6 highway, created "operational issues" that led to incomplete and delayed deliveries. As a result, over three-quarters of KFC locations in the UK and Ireland were closed, and the company had to take out full-page newspaper ads to apologize to customers.
While KFC tried to make light of the situation, the impact on its business was significant. The closures and limited menus damaged the company's reputation and drove customers to rival fast-food outlets. The incident also raised questions about sustainability and food waste, with reports of entire lorries of chicken spoiling in the depot due to waiting times and temperature control issues.
In addition to supply chain issues, KFC has faced criticism for its declining customer service standards. Customers have taken to social media to complain about issues such as unfulfilled orders and employees calling to insist that customers bring back incorrect orders. The company's failure to keep up with the competition in terms of menu options and healthiness has also been cited as a reason for its struggle to retain customers.
The decline in quality and service standards has had tangible effects on KFC's operations. In 2024, 13 KFC restaurants in the UK and 25 in the US shut down, with more closures in Malaysia. While some of these closures were attributed to franchising issues, they reflect a wider problem within the company. KFC's decision to move its headquarters from Kentucky to Texas in 2025 indicates a shift in identity and an attempt to cut costs.
Overall, KFC's decline in quality and service standards has resulted in a loss of customers, damaged reputation, and financial struggles. The company faces an uphill battle to regain its footing in a highly competitive market.
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KFC's franchising issues
KFC has been facing significant challenges in recent years, with declining quality and service standards, a failure to keep up with evolving consumer preferences, and a highly competitive market landscape. These issues have contributed to a noticeable decline in the brand's performance and a struggle to maintain its relevance.
One of the critical issues impacting KFC is its franchising model. In 2024, 13 KFC restaurants in the UK suddenly shut down due to franchising issues and changes in ownership between companies. This trend is not isolated to the UK; in the same year, dozens of KFC outlets across Malaysia closed their doors, with over 100 closures in a span of six months. These closures were attributed to the struggles of the franchising companies operating these outlets. In the United States, about 25 KFC locations abruptly closed in Illinois, Indiana, and Wisconsin. These closures were linked to the same franchisee, EYM Chicken, which also owned several Pizza Hut locations that met a similar fate.
The issues with franchising have had a significant impact on KFC's operations and reputation. Franchisees operate 95% of KFC's outlets in the UK, and when these franchises encounter difficulties, it leads to widespread closures and disrupted operations. The franchise model makes it challenging for KFC to ensure consistent standards across all outlets, potentially impacting the brand's image and customer loyalty.
Additionally, KFC has faced criticism for its response to the franchising issues. While the company stated that it would pay its staff as usual during the 2018 chicken shortage crisis, it did not explicitly mention compensating franchisee operators for lost business. This has raised questions about the support and stability that KFC provides to its franchisees, potentially impacting the confidence of current and prospective franchise owners.
To address these franchising issues, KFC may need to reevaluate its franchise model and support structures. Ensuring that franchisees have the necessary resources, guidance, and contingency plans to navigate challenges could help prevent sudden closures and maintain consistent standards across all outlets. By strengthening its franchising system, KFC can work towards restoring customer trust and reversing its recent decline.
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KFC's lack of contingency planning
KFC has been facing a crisis with restaurants suddenly closing their doors, competitors threatening the brand, and a noticeable decline in quality and service standards. In 2018, KFC's UK outlets were forced to temporarily close due to a chicken shortage. This was caused by issues with their new delivery partner, DHL, and their single warehouse in Rugby. The logistics partner took the blame for incomplete and delayed deliveries due to operational issues.
However, the issue also highlights a lack of contingency planning on KFC's part. Supply chain expert Dani notes that the problem was exacerbated by KFC's specialized menu and single warehouse, which made the disruption more noticeable to customers. With no backup plan, KFC was forced to shut down locations, and over two-thirds of its restaurants in the UK and Ireland were closed. This led to a loss of public confidence and raised questions about food waste and the impact on farmers in KFC's network.
The closures also affected KFC's operations in other countries. In Malaysia, dozens of KFC units shut down, and more than 100 closed within six months in 2024. While this was dubbed a temporary closure, it was a significant blow to the brand. Additionally, 13 KFC restaurants in the UK shut down in 2024, and about 25 locations in the US abruptly closed their doors without warning.
The lack of contingency planning, combined with other issues such as declining customer service, franchising problems, and a failure to keep up with competitors, has contributed to KFC's struggle to keep its doors open. The company's decision to move its headquarters from Kentucky to Texas further indicates a brand in flux. While KFC has tried to make light of the chicken shortage with cheeky apologies, it remains to be seen how they will address the deeper issues at play.
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Frequently asked questions
Yes, in 2018, KFC was forced to close hundreds of restaurants across the UK and Ireland due to a chicken shortage.
The chicken shortage was caused by a combination of factors, including a switch to a new delivery partner, DHL, and a single-warehouse distribution model.
KFC took out full-page newspaper ads to apologize for the closures and assured customers that they were working "flat out" to resolve the issue.
Yes, by the end of the week, most KFC stores had reopened, and the company worked to rebuild confidence with its customer base.
Yes, KFC has struggled with declining sales, poor customer service, a decline in quality and service standards, and increased competition from other fried chicken restaurants.
