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It’s not a great time for fast-food companies, unless you’re Taco Bell

Taco Bell is keeping Yum! Brands afloat and (so far) it’s winning the fast-food value war.

J. Edward Moreno
11/5/24 11:09AM

America’s inflation comfort food is, apparently, Taco Bell. 

The chain restaurant is known for its Mexican-inspired cheap eats and items that sound like they were made in a test lab for stoners, like its giant Cheez-It tostada. It’s also the only restaurant in the Yum! Brands portfolio that is actually growing. 

Taco Bell’s siblings, KFC and Pizza Hut, each saw same-stores sales decline of 4%, according to a Yum! Brands quarterly filing released Tuesday. Taco Bell’s same-store sales, meanwhile, were up 4%.

Taco Bell represents 75% of Yum! Brands profits, CEO David Gibbs told investors on Tuesday. The company as a whole missed Wall Street estimates, but investors still sent its stock rising about 2%.

Taco Bell’s success comes at a tough time for fast-food brands. Many of them raised prices over the past couple years until they hit a ceiling where customers no longer recognized them as the cheap meal they once knew. If they’re going to pay $15 for a meal, they’re going to go to the more premium chains like WingStop or Chipotle.

This summer, restaurants started rolling out value meals aimed at fixing their relationship with customers. McDonald’s introduced its $5 meal deal and its CEO, Joe Erlinger, declared to Bloomberg News in June that he is “committed to winning the value war.”

But so far, Taco Bell is wining that war. It’s the only one of its top fast-food competitors that reported same-store sales growth: Wendy’s and Burger King were virtually flat, and McDonald’s was down 1.5% as of the end of September.

Gibbs said Taco Bell’s advantage is that it “can provide a product that is a value product, that’s an innovative product, and that can help our franchisees’ margins.” In other words, you might go to Taco Bell to try the new Cheez-It tostada or because you only have $5.

“We’re very confident in Taco Bell’s ability to win in this environment relative to our peers," Gibbs said.

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Amazon is testing adding GM electric vans to its EV delivery fleet dominated by Rivian

Rivian may have some competition in its electric delivery van division: Bloomberg reports that Amazon is testing a small number of GM’s BrightDrop vans for its fleet.

According to Amazon, the test currently only includes a dozen of the vehicles. Amazon’s fleet also contains EVs from Ford, Stellantis, and Mercedes-Benz.

GM debuted BrightDrop in 2021, but the vehicles have struggled to sell and piled up on GM lots due to high prices and steep competition. GM began offering up to 40% rebates on the vehicles this year.

The test comes as Rivian struggles through tariffs and the end of EV tax credits. Earlier this year, it lowered its annual delivery outlook by about 13%. As of June, Amazon said it has more than 25,000 Rivian vans across the US. Earlier this week, Rivian CEO RJ Scaringe said the company is still on track to deliver 100,000 vans to Amazon by 2030 and is “thinking about what comes beyond” that initial target.

GM has sold 1,592 BrightDrop vans through the first half of the year, more than the full-year total it sold in 2024.

GM debuted BrightDrop in 2021, but the vehicles have struggled to sell and piled up on GM lots due to high prices and steep competition. GM began offering up to 40% rebates on the vehicles this year.

The test comes as Rivian struggles through tariffs and the end of EV tax credits. Earlier this year, it lowered its annual delivery outlook by about 13%. As of June, Amazon said it has more than 25,000 Rivian vans across the US. Earlier this week, Rivian CEO RJ Scaringe said the company is still on track to deliver 100,000 vans to Amazon by 2030 and is “thinking about what comes beyond” that initial target.

GM has sold 1,592 BrightDrop vans through the first half of the year, more than the full-year total it sold in 2024.

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Paramount Skydance reportedly preparing an Ellison-backed Warner Bros. Discovery takeover bid, sending shares soaring

Paramount Skydance is preparing a majority cash bid for Warner Bros. Discovery, The Wall Street Journal reported, sending shares of both companies surging. The Journal’s sources say the deal is backed by the Ellison family, led by David Ellison.

WBD shares were up 30% on the report, while Paramount Skydance jumped 8%.

The offer would cover WBD’s entire business — cable networks, movie studios, the whole enchilada. That comes after WBD announced plans last year to split into two divisions: one for streaming and studios, the other for its traditional cable and TV assets. A recent Wells Fargo note gave WBD a price target hike, primarily because the analysts viewed it as a prime takeover candidate.

If the deal goes through, it would bring together HBO, CNN, DC Studios, and Warner Bros.’ film library with Paramount+, Nickelodeon, and MTV, all under one umbrella.

The offer would cover WBD’s entire business — cable networks, movie studios, the whole enchilada. That comes after WBD announced plans last year to split into two divisions: one for streaming and studios, the other for its traditional cable and TV assets. A recent Wells Fargo note gave WBD a price target hike, primarily because the analysts viewed it as a prime takeover candidate.

If the deal goes through, it would bring together HBO, CNN, DC Studios, and Warner Bros.’ film library with Paramount+, Nickelodeon, and MTV, all under one umbrella.

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