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Here is the deal about Christmas in Japan. Like Halloween, Japanese have their own special rendition and way of celebration of the holiday. While thoughts of Christmas ham, oven-roasted turkey, mash potato, eggnog, Christmas pudding and all sorts of Christmas goodies comes to mind, in Japan, you usually have difficulty getting access to all of this. While, as a foreigner living in Japan, I have my fair share of parties hosted by my foreigner friends to get access to these goodies. However, as a native Japanese with little or no gaijin friends, they are limited in their options.
Brilliant advertising campaigns over the years have been known to change Japanese culture to the point where they continue being practiced even after decades. These include girls giving the chocolate on Valentine' Day, made popular by a campaign by Isetan in 1958, and giving KITKAT with a message written on the back as a good luck charm for students taking the entrance exams. Eating KFC is no exception. An advertising campaign by KFC in 1974 called ‘Kentucky for Christmas!' sparked this “tradition” and it continued ever since.
While there would be long lines at KFC during Christmas periods, it definitely is not a fashionable or trendy thing to do in my opinion. And in Japan, Christmas is strongly regarded as a couple's holiday where you would go look at festive illuminations around Tokyo, so KFC should be for the family and friends gathering. Don't put off your potential date by asking her to eat chicken with you at KFC. If possible, being able to eat actual turkey with proper Christmas sides would be what any Japanese would like to do if they can get access to it. But it is out of convenience and habit that the Japanese people resort to KFC.
EDIT: If you want to know what you should buy for a Christmas meals, go down to the food section of a reputable department store like Takashimaya. I've added some photos of what they were mainly selling on Christmas Eve. It was mainly chicken, roast beef and Christmas cakes.
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