This Fast Food Chain is Carrying the Rest of the Family with 75% of the Company’s Profits
Well, Taco Bell has officially become America’s “I’m broke but still want to eat” go-to. If you’ve ever looked at your bank account and thought, “Can I survive until payday without selling my car?” (we’ve all been there, right?), Taco Bell was probably there to rescue you with a bean burrito and soft taco (which may or may not be dog food).
The chain of over 7,000 restaurants that started way back in the 1960’s, has figured out how to give you a meal that won’t have you questioning your life choices (except when you visit the bathroom) while still making you feel like you’re eating something vaguely healthy. (Okay, maybe “vaguely” is the key word here.)
That said, Taco Bell is on fire. Last quarter, they delivered a 4% jump in same-store sales. Let that sink in: Taco Bell is crushing it, while its Yum! Brands siblings, KFC and Pizza Hut, are slipping like they’re trying to climb an escalator going the other way. Both KFC and Pizza Hut saw a 4% dip in same-store sales. KFC’s original recipe might still be finger-lickin’ good, but it’s clearly not good for sales right now.
So how is Taco Bell doing it? The answer’s simple—value. Taco Bell has cracked the code on how to give people what they want: cheap, filling, and actually fun food. Whether you’re indulging in their latest bizarre creation, like the Cheez-It Tostada (which, by the way, is as ridiculous and delicious as it sounds), or you’re just grabbing the old reliable $5 Cravings Deal, Taco Bell’s entire business model is built on making you feel like you’re getting more for your money than you deserve. I mean, a Cheez-It Tostada for just $2.99? Who cares if it gives me explosive diarrhea.
At the same time, it’s southern and italian counterparts (KFC and Pizza Hut) are charging you $15 for a bucket of fried chicken and a pizza that’s...well, it’s pizza, but let’s all admit Pizza Hut isn’t the same anymore. And KFC’s move to slap “premium” prices on its famously greasy chicken? Let’s just say the finger-lickin’ appeal isn’t translating to wallet-lickin’ loyalty these days.
As for Pizza Hut, they’re trying to convince you that their pan pizza is worth the price of a Netflix and Disney+ subscription combined, but I’ll be honest, most people would rather just hit up a local pizza joint and pay a little more for wood fired pies. So, when people are looking for affordable comfort food, they’re going straight to Taco Bell.
Unlike KFC and Pizza Hut, which are stuck in their old ways, Taco Bell keeps pulling new menu items out of left field. Seriously, no one else is out here dropping a Cheez-It Tostada or an infinite burrito every other month. Taco Bell is constantly innovating and making you feel like a kid at a candy store, but with way more hot sauce packets and questionable nacho cheese choices.
CEO David Gibbs isn’t bashful about the fact that Taco Bell represents 75% of Yum! Brands’ profits right now. Without Taco Bell, Yum! Brands would be sitting in the fast-food doghouse with the rest of the declining chains.
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Stock.News has positions in Yum Brands mentioned in article.