The chain has learned a lesson from McDonald’s that it believes will make you come in more often.
Taco Bell has had a frenetic year. The Yum Brands (YUM) – Get Free Report chain makes more menu changes than its three biggest rivals combined, constantly giving its fans a reason to visit and keeping its name in the news.
The chain tried everything from chicken wings (for a single week) to countless variations on its core menu items with slight variations in ingredients. It used Pete Davidson as a spokesperson to make fun of its own breakfast menu and it most famously brought back its famed Mexican Pizza.
The latter move was either a debacle or a stroke of genius, depending on who you ask. The beloved menu item returned and then quickly sold out, with the chain promising its eventual permanent return. It’s hard to know if that was a mistake or by design, but it generated a lot of publicity.
Now, the chain’s CEO, Mark King, shared plans for more big menu changes and for a popular limited-time offer to join its permanent menu at Yum Brands investor’s day.
Taco Bell Learns a Lesson From McDonald’s
King believes that Taco Bell can do more business at breakfast and lunch.
“Our competitors have way more reasons for customers to go to them, if you look specifically at McDonald’s dayparts, coffee treats,” he said, adding that Taco Bell’s breakfast and lunch dayparts are ‘significantly’ behind the Golden Arches, even though dinner and late-night business is on par, Nation’s Restaurant News reported.
That explains why the chain has simplified its breakfast menu and put big money behind pushing that concept with the Davidson-led ads. King, however, wants to do more than that to enhance its breakfast and lunch offerings.
“We’ve been in and out of breakfast for seven years. It’s time to commit to it. We are committed to closing both of those gaps and have big opportunities in just those two dayparts to increase business in the coming years,” King said. “Chicken is a big one. Right now, a large percentage of our business is beef and the Gen Z consumer wants chicken.”
The CEO also said that Taco Bell plans to make its Nacho Fries a permanent menu item. He believes doing that will “increase lunch dramatically.”
Digital Also Offers Taco Bell an Opportunity
McDonald’s has been a leader in introducing digital technology. That helped it greatly during the pandemic. The fast-food giant has continued to push in that area using digital promotions to grow its loyalty base.
Taco Bell, and really Yum Brands in general, wants to follow that model. That effort has been dubbed “RED,” by the company, which stands for “relevant, easy, distinctive”.
That’s a special innovation team that will focus on “our specific areas: computer vision to help team members more effectively fulfill orders, for example; labor productivity, including a test of robotics in the back-of-house; drive-thru productivity, including conversational AI at the drive-thru; and Internet of Things to help save on administrative and other costs such as energy,” NRN’s Alicia Kelso reported.
Ultimately, Yum wants to have its digital efforts drive its growth.
The company has seen its digital sales double from 20% to 40% of its business since the pandemic.
All of the chain’s key brands (KFC, Pizza Hut, and Taco Bell) made menu changes during the period when there were pandemic-related dining room closures. Many of those changes have been rolled back, but the company did learn a lot of lessons as to how to operate its delivery and drive-through business more efficiently.