Taco Bell, KFC and Pizza Hut Plot Special Items and Deals to Win Back Customers

Tacos, pizza, and fried chicken will always be popular, but Americans don't always get them from Taco Bell, Pizza Hut, and KFC. Yum Brands Inc., the parent company of all three, is hoping to reverse a downturn by offering more new items and promotional deals. The company shared weak numbers in its second quarterly earnings report for 2022 on Wednesday.

The demand for pizza, chicken, and tacos has slowed among low-income consumers as the prices for gas and everyday needs rise. The decrease became more pronounced in the latest report. Rising costs for ingredients, labor, and packaging material also led overall expenses to increase by 4% while missing estimates, reports Reuters. Yum reported quarterly same-store sales growth of just 1%, with Taco Bell picking up the slack. Taco Bell's 8% increase was actually better than expected, making up for slow growth at KFC and Pizza Hut.

During the earnings call with analysts, Yum Brands CEO David Gibbs said the company is "reacting accordingly" after the loss of sales from low-income consumers became "more pronounced" in the last quester. "We've seen that in our business and we're reacting accordingly," Gibbs explained. "So we know the formula to win in any environment for us is to have a lot of brand buzz, have product news, and to have great value. You got to -- you can't pick one of those things. You got to deliver on all three."

Elsewhere in the call, Gibbs explained what made Taco Bell so successful compared to Yum's other two big brands, highlighting the return of the Mexican Pizza. "Despite significant inflation, Taco Bell maintained restaurant margins by leveraging its pricing power for premium products and craveable [limited time offerings] while still providing consumers with everyday value through a broad range of price points, such as those items featured on the cravings value menu," Gibbs explained. "The return of the Mexican pizza as an LTO this quarter is a prime demonstration of these strengths."

Taco Bell, Pizza Hut, and KFC have all made headlines recently for new or returning menu items. The Mexican Pizza's return earned more attention than anything other item, quickly selling out. This week, Taco Bell added it as a permanent menu item. Pizza Hut recently refreshed its pasta offerings with the new Oven-Baked Pasta dishes, while KFC is constantly testing out new chicken sandwiches. KFC also rested out Kentucky Friend Nuggets in two markets last month.