Yum Brands (YUM.NYSE), the owner of KFC and Pizza Hut, pledged to be more selective in its pace of expansion in China, as growing competition eats into the restaurant chain’s profits, Reuters reported. The company said it is targeting smaller Chinese cities and opening more Pizza Hut units in an effort to boost its profits. It expects sales to pick up in the second half of 2013, after weaker first-half results. Yum warned last week that it expected its same-restaurant sales in China to fall 4% in the fourth quarter as it faces competition from a host of US, Taiwanese, Japanese and local brands, including McDonald’s (MCD.NYSE), Dico’s, Ajisen (0538.HKG) and Yonghe King. Yum has more than 5,100 restaurants in China that generate more than 50% of its overall revenue and profits. It previously announced a goal to open 700 new units in China in 2013.
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