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. Taco Bell loyalty members returned to stores twice as fast as non-members after the summer disruption, driving a 25% year-over-year surge in total U.S. loyalty membership. Meanwhile, KFC recorded a 48% increase in global loyalty members. excluding China.
To drive store efficiency and check sizes, Yum is accelerating the deployment of its proprietary “Byte” technology ecosystem. More than 900 Taco Bell locations now use voice artificial intelligence at the drive-thru, with plans to expand to over 1,500 restaurants by year-end.
The automated ordering tool has led to a 6% increase in customer satisfaction alongside a 1.5% sales uplift. At the same time, management said Yum’s new Smart Ops kitchen display system reduced drive-thru speeds by 8% and trimmed delivery driver wait times by more than 20 seconds in initial U.S. deployments.
Yum’s strategic priority is “reaching the full potential of Byte and our digital capabilities” by shifting AI from testing to enterprise scaling, Turner said.
