Taco Bell got a long overdue boost in quarterly sales thanks to the national buzz tied to the debut of its Doritos Locos Tacos.
Irvine-based Taco Bell reported a 6 percent increase in same-store sales for the first quarter. During that time, Taco Bell debuted the "reinvented" taco -- a classic crunchy taco served with a Doritos nacho cheese shell.
Taco Bell's same-store sales growth for the quarter beat increases among its parent company's other brands -- Pizza Hut and KFC. That's good news for Yum as Taco Bell generates about 60 percent of Yum's domestic profits.
The first-quarter results come nearly a year after Taco Bell sales were damaged, in part, after the chain was sued for falsely advertising its seasoned beef as real beef. The lawsuit was eventually dropped, but the publicity tied to the claim led to slumping 2011 sales.
In a conference call to investors on Thursday morning, Yum leaders said Taco Bell is on a roll. The company projected same-store sales for the second quarter to beat first quarter results.
"This should only get better in the second quarter with the historic launch of the Doritos Locos Taco," Yum Chief executive David C. Novak said.
Novak briefly discussed Taco Bell's First Meal breakfast program and the testing of upscale menu Cantina Bell.
Novak said he's "encouraged" with results for breakfast. The new 11-item meal program debuted in 750 restaurants in
January, including dozens of company-operated locations in Southern California.
He said Taco Bell, which turned 50 this year, will expand First Meal to 200 more stores later this year.
As for Cantina Bell, he didn't reveal details about expanding the line of rice-stuffed burritos, tacos and bowls beyond its current test market. The menu contains upscale Mexican foods made with cilantro rice, black beans and corn salsa. Taco Bell is testing the foods in Bakersfield and Louisville, Ken.
In Orange County, the new foods have been spotted in Taco Bell restaurants in Tustin, Lake Forest and Santa Ana.
"This initiative is designed to broaden the appeal of Taco Bell," he said. "Obviously we have a lot going on at Taco Bell and we're pleased with the progress we are making."
The Doritos taco launch comes as Taco Bell moves from being a "food as fuel" restaurant to a "food experience" restaurant. The new marketing strategy kicked off with a slogan change. Earlier this year, Taco Bell scrapped its "Think Outside the Bun" slogan, changing the chain's message to "Live Mas."
The company has also spent the last few years converting company stores to franchise units. Of the 5,600 Taco Bell restaurants in the U.S., roughly 80 percent are run by franchisees.
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News Column
Taco Bell Sales Get Big Boost from Doritos Locos Tacos
April 20, 2012
Nancy Luna
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Source: (c)2012 The Orange County Register (Santa Ana, Calif.) Distributed by MCT Information Services
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