KFC Adds Digital C-Suite Role as Virtual Competition Heats Up

This week in restaurant news, KFC adds its first chief digital officer, WOWorks adds seven new virtual brands, and Uber Eats reportedly follows through on its stated goal to wean out thousands of ghost kitchens on its platform.

Quick-service restaurant (QSR) giant KFC, which has more than 28,000 locations around the world, announced in a Friday (July 14) press release the creation of a chief digital officer role and the appointment of hospitality veteran Paul Tuscano, who has spent the last seven years as a vice president focused on mobile products at Marriott.

KFC said in the release that the goal of this position is to “drive digital priorities further,” working alongside the chief technology officer.

“Paul’s impressive career has focused on providing customers with an optimal experience, and his passion for the customer journey makes him the right leader to take our digital business to the next level,” KFC President Tarun Lal said in the release.

The news comes amid KFC’s parent company Yum Brands’ ongoing effort to drive its digital mix as the QSR industry increasingly shifts toward off-premise eCommerce channels.

“We continue to execute on our digital strategy to create more seamless, personalized experiences to drive greater customer engagement and easier access to our brands,” Yum Brands CEO David Gibbs told analysts on the company’s last earnings call. “These efforts resulted in broad-based acceleration in digital sales growth, leading to a record quarter for both digital system sales of nearly $7 billion and a digital sales mix that exceeded 45%.”

Digital is key to attracting and retaining today’s restaurant customers. Research from PYMNTS’ study “ConnectedEconomy™ Monthly Report: The Urban-Rural Health Divide Edition,” which drew from a survey of nearly 2,500 U.S. consumers, revealed that 75% of consumers living in urban areas, 46% of those in the suburbs and 28% of those in rural regions engage with restaurants digitally.

WOWorks Adds Seven Virtual Brands in Bid to Drive Digital Sales

Fast-casual company WOWorks, another restaurant group looking to drive its restaurant sales, shared in a Tuesday (July 11) press release that it is launching seven new fast-casual brands in partnership with Olo.

The launch comes as third-party aggregators “have become the driving force behind a culinary revolution,” the release said, transforming the restaurant industry landscape.

“WOWorks’ new virtual brands are a testament of its guests’ increasing demand for more nutritious and flavorful meal options that can be enjoyed on the go,” WOWorks CEO Kelly Roddy said in the release. “Our partnership with Olo will allow WOWorks’ franchisees to add on additional revenue streams that can leverage their existing menu offerings in front of an increasing audience on third-party online food delivery sites.”

These brands focus on soup, sandwiches, toast, bowls, smoothies, gyros, and mac and cheese.

For now, delivery still makes up only a fraction of total restaurant sales. According to data from PYMNTS’ study “Connected Dining: Rising Costs Push Consumers Toward Pickup,” which drew from a survey of more than 2,100 U.S. consumers earlier this year, just 10% of restaurant customers reported having placed their last order for delivery.

Uber Eats Cuts 8,000 Virtual Brands From Its Platform

In additional virtual brand news, Uber Eats’ initiative to control the ghost kitchens on its platform, originally announced in March, has gone even further than the company’s initially-stated intention to cut 5,000 online storefronts, reducing its total count by about 13%.

The company has exceeded that 5,000 figure by 60%. In news initially reported by Insider and confirmed by Uber to PYMNTS via email, the company has removed 8,000 virtual restaurants from its marketplace. This marks a reduction of 20% from the 40,000 virtual storefronts, by Uber’s count, in March.

“With the boom in virtual restaurants over the past several years, we’ve noticed a wide range of approaches to creating virtual restaurant brands,” John Mullenholz, Uber’s head of virtual restaurants and dark kitchens for the U.S. and Canada, said in a statement at the time.

Through this initiative, dubbed the Certified Virtual Restaurant Program, Uber Eats takes a more central role in creating and controlling virtual brands on its marketplace, creating a plug-and-play solution for merchants to add restaurant concepts curated by Uber and created alongside virtual brand partners Virtual Dining Concepts, Nextbite and Acelerate.