The encyclopedia · Strategy & Leadership · Operational decision · 2018
KFC UK switched to DHL and lost chicken supply — 646 stores closed overnight
KFC replaced a six-warehouse network with a single DHL depot, and a traffic jam made chicken undeliverable to 75% of UK stores.
KFC · Yum! Brands · 2018-02
What happened
KFC UK had 870 restaurants across the country, supplied by Bidvest Logistics through six regional warehouses. In 2017 the company decided to switch to DHL Supply Chain, a global logistics giant, expecting better efficiency and cost savings. The contract went live on 14 February 2018, with DHL operating from a single new warehouse in Rugby.
On the first day, a multi-vehicle collision on the M6 motorway near Rugby caused severe traffic delays. With no other warehouse to fall back on, the entire supply chain stopped. The single depot could not handle the volume, and the new IT system added complexity. At the peak, 646 of KFC's 870 UK stores were closed — more than 75%. KFC's website added a 'find a KFC open near me' tool.
KFC lost 2% of same-store sales and 5% of operating profit in the first quarter. 255 jobs were lost at the Bidvest depot that closed. Yum! Brands reached a settlement with DHL, but the amount was not disclosed. The crisis became a case study in supply chain fragility: a single point of failure turned a logistics upgrade into a national shutdown.
Why it happened
- KFC centralized its entire UK supply chain into a single warehouse, eliminating the redundancy that had kept the network resilient across six depots.
- The transition to DHL coincided with a new IT system and new processes, creating a cascade of unfamiliar systems that failed together when pressure hit.
- The contract gave DHL no incentive to maintain fallback capacity, so when one warehouse was blocked by a traffic incident, the entire network stopped.
The lesson
A single-warehouse supply chain without a contingency plan is not a supply chain — it is a bottleneck with a delivery schedule.
Sources
- BBC — Chicken chaos as KFC closes outlets
- The Guardian — Most KFCs in UK remain closed because of chicken shortage
- WIRED — The inside story of the great KFC chicken shortage of 2018
- Supply Chain Dive — KFC recovers from DHL disruption, but at a cost
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