Chinese media highlighted the "KFC Index" as one of the indicators for forecasting China's consumption market. The "KFC Index" refers to the average per-customer spending at KFC (Kentucky Fried Chicken) of U.S. origin, which Yum China publicly announces in its quarterly reports. Experts view "the stability and recovery of average customer spending as a positive change in the consumption market."

According to China News Service (CNS), looking at the past year, KFC's average per-customer spending saw a 4% decline in Q1 year-on-year, followed by a 1% increase in Q2, a 1% decline in Q3, and remained flat in Q4.

During the same period, the year-on-year growth rate of KFC's system sales expanded from 3% in Q1 to 8% in Q4. Wu Mianqing, CEO of the data research institution Baiguan Technology, recently stated at a financial and economic salon for domestic and foreign media hosted by the Shanghai Municipal Information Office that "this index had been declining since Q2 2023, but signs of recovery are now beginning to emerge." He added that multiple micro-data points, including the "KFC Index," indicate that China's price levels are moving from stability to a gradual recovery.

According to data from the National Bureau of Statistics, the national Consumer Price Index (CPI) in Q1 this year increased by 0.9% year-on-year, surpassing the growth rate of the previous full year by 0.9 percentage points. In April, the growth rate further expanded to 1.2%.

Liu Zhicheng, a researcher at the National Development and Reform Commission's Macroeconomic Research Institute, analyzed, "The stability and recovery of average per-customer spending are the result of market inherent movements coinciding with policy guidance, and it is a positive signal that the consumption market is continuously recovering and heading towards maturity."

Liu pointed out that extremely low prices tend to lead to a decrease in merchants' profits and a decline in product and service quality, which is particularly likely to occur when consumer demand is relatively weak. He stated, "This change is not coincidental, but mainly due to three factors."

First, consumer demand is gradually recovering, and consumers are shifting from a stage where they only seek "the cheapest options" to placing more importance on quality, experience, and satisfactory cost performance. The market is returning from price competition to value competition.

Second, due to the recent surge in international crude oil prices, costs have clearly risen in some mid-to-downstream industries. The scope for companies to continue extreme low pricing has significantly narrowed, and more companies are trying to secure healthy profits through improvements in products, services, and efficiency.

Third, he mentioned that as the Chinese government advances the correction of "neijuan-style" competition, meaning excessively exhaustive competitive practices, regulation against disorderly low-price competition has strengthened, and inappropriate competitive behaviors are being curbed.

Regarding the effects brought by price recovery, Liu remarked, "For consumers, a gradual increase in prices eases excessive expectations of price declines and boosts confidence in income and employment, making them more likely to be positive about consumption." On the other hand, regarding daily necessities, he stated that "significant impacts on residents' lives can be prevented through measures to ensure supply and stabilize prices." (Edited by Hinata)