Fast-food giant Yum Brands is focusing on technology adoption and customer retention as its diners are squeezed by fuel prices.
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The owner of KFC and Taco Bell reported third-quarter earnings results Tuesday (Nov. 3) that showed a 1% increase in sales.
At Taco Bell, low-income diners gravitated toward discount offerings, including a menu featuring 10 items for $3 or less.
“With higher gasoline prices pressuring household budgets, Taco Bell’s value architecture remains a critical advantage over its peers,” Yum Brands CEO Chris Turner said during a Tuesday earnings call.
Loyalty programs are central to “battling for future consumers who seek more personalized, relevant and seamless experiences,” Turner said.
The company’s digital channels proved crucial to retaining core customers following a mid-summer food safety disruption, in which a cyclosporiasis outbreak was traced to Taco Bell lettuce.
The disruption caused a dip in sales for Taco Bell in July, but Yum Chief Financial Officer Ranjith Roy said the company expects fourth-quarter sales to return to normal.
“At this time, we see consumer visits by heavy users of the brand have rebounded fully, while visits by medium and light users are tracking to 95% of prior levels,” Roy said.
Since the end of September, Taco Bell has been outpacing the rest of the quick-service restaurant sector on same-store sales growth, Turner said.
The digital push served as a key stabilizer. S.
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