Taco Bell Sales Are 'On a Roll' As It Brings Back a Popular Value Deal
Taco Bell is "on a roll" right now after it enticed more and more customers to its restaurants with value deals and big promotions, company leaders announced this week.
Yum Brands!, the parent company of Taco Bell, KFC, Pizza Hut, and The Habit Burger Grill, just reported its earnings for the third quarter of 2023 on Nov. 1. The quarterly results were mixed for the company, which beat analyst estimates on earnings while falling short of estimates on revenue. However, when you single out Taco Bell, the chain performed well across the board during the period.
Taco Bell beat analyst expectations as its same-store sales grew 8%. It also saw an 11% increase in its overall system sales and a 5% increase in store count.
"The business is obviously somewhat on a roll if you look at the results from the last quarter," Yum's CEO David Gibbs said of Taco Bell during an earnings call with investors on Nov. 1.
Gibbs credited several key factors for Taco Bell's recent success. For starters, he said that the temporary return of Taco Bell's $5 Cravings Box meal deal over the summer drew in more customers with its "compelling price point." Big promotions like the successful fight to free the Taco Tuesday trademark helped increase awareness of the Taco Bell brand, while digital sales increased a whopping 45% in the third quarter compared to the previous year, Gibbs added.
He also noted that some consumers might be ditching pricier eateries and dining at quick-service chains like Taco Bell instead. Transactions grew 2% to 3% across all customer income levels during the quarter.
"So our stores in lower-income trade areas are performing well with good transaction growth, just like our stores in high-income trade areas. I think that speaks to the way Taco Bell can play value with things like the $5 box. And how also in a pressured consumer environment, we're probably benefiting a little bit from some trade down in those higher-income trade areas," Gibbs said.
Looking forward to next year, Yum Brands! has high hopes for Taco Bell continued success. Gibbs hinted at some exciting upcoming developments for the chain .
"If you've seen the actual detailed plans for next year, you'd be as excited as I am. I'm obviously not going to share a lot of the proprietary stuff, but things line up well for a strong 2024 for Taco Bell," he said.
The third quarter wasn't quite as kind to Yum's other brands. KFC's same-store sales increased 6% globally during the quarter, driven by a strong 7% increase in same-store sales from its international. But in the United States, the chicken chain's same-store sales did not increase at all. It also recently lost its spot as the second-biggest chicken chain in the country to Popeyes. Meanwhile, Pizza Hut's same-store sales in the United States also stayed flat during the quarter, while The Habit's same-store sales declined 5%.
Sign up for our newsletter!
