Fast-food earnings come in stale, but Taco Bell rings in growth with zesty launches
Undercooked… Fast-food earnings didn’t hit the spot. Yum! Brands — the owner of KFC, Pizza Hut, and Taco Bell — had a disappointing quarter as same-store sales fell 4% at its pizza and fried-chicken chains. Yum’s global comparable sales dipped as KFC and Pizza Hut dragged down results. The KenTacoHut legend blamed it on “geopolitical conflicts and challenged consumer sentiment.” Rival Restaurant Brands International also unboxed a bummer quarter, as Burger King and Popeyes stores saw weaker US sales.
The taco belle of the ball… Yum’s Taco Bell chain was a standout, reporting same-store growth of 4%. The brand, known for late-night comfort food like the Crunchwrap Supreme, makes up 75% of Yum’s US profit. Buzzy items like the Big Cheez-It Tostada, which returned to menus in September, and the debut of a $7 value meal drove sales growth. Yum boss David Gibbs said that last quarter consumers perceived Taco Bell to be the most value-friendly chain, a grande advantage when folks are ditching inflated fries.
Fast-foodies have been trying to lure customers back with deals after years of price hikes. Burger King, McDonald’s, KFC, and Wendy’s have all served up $5 value meals.
Fast-casual spots TGI Fridays, BurgerFi, Red Lobster, and Buca di Beppo have all declared bankruptcy this year as Americans opt to eat at home to save $$.
You need value + spice… In an industry where everyone’s laser-focused on discounts, fast-food chains need extra flavor to stand out. Gibbs said Taco Bell’s edge is that it can provide both value and innovation. Low prices alone didn’t drive the chain’s sales growth; the rollout of new items like Cheesy Street Chalupas helped.