Digital Natives Drive Yum Brands On-line Sales

Customer migration from food channel to food channel continues to reconfigure the food retail landscape according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®. The internet is not just an informational super highway.  The internet has intersections where digital natives including Gen Z and Millennials hangout in search of food discovery.

Here is why Gen Z has become so important to foodservice they account for 27% of the U.S. population. Combine that with Millennials that account for 22% of the U.S. population and you can see why digital natives have become so important to the future of foodservice.

Like the generation before them Gen Z’s has a desire for seamless digital experiences, purpose, and convenience, all fast, where digital differentiation discovery that they consume and can share is simply second nature to them. So, consider this Yum Brands, digital sales reached an all-time high of $3.5 billion for the quarter, an increase of more than $1 billion compared to the same period last year.

CEO David Gibbs stated “I think we've demonstrated that the business is incredibly resilient and nimble [and] that our teams around the world can move with speed to get new solutions out to meet customers' needs,”

Now, two of Yum’s four brands, KFC and Pizza Hut, posted positive same-stores sales in the U.S. Yet, Taco Bell, which “had the most ground to make up” as it was hit hard at the start of the pandemic, is posting positive comps in the current quarter. For the second quarter, the Irvine, Calif.-based chain reported an 8% drop in same-store sales. But that’s coming off a 7% gain in the same quarter last year.

Gibbs continued “That's enormous progress given the hit to their business,” …. “Taco Bell “pivoted really well” in the second quarter by trimming the menu to serve only the items that consumers love and adding innovative products such as the new Grilled Cheese Burrito and the $5 Cravings Boxes. 

During the quarter, Taco Bell added more than 1 million new users to its digital channels and served an additional 4.8 million cars through the chain’s drive-through lanes, underscoring the strength of the brand’s off-premise business. 

Regular readers of this blog know a hallmark of grocerant niche fresh food fast is fast, and at Taco Bell they reduced drive-through wait times by 18 seconds and began testing curbside pickup. All of that will contribute to incremental food sales according to Johnson.

Gibbs noted that Yum’s global same-store sales were down 15%. Broken down by division: KFC same-store sales were down 21%; Taco Bell dropped 8% and Pizza Hut was down 9%. The Habit Burger Grill, which the company acquired in March, logged an 18% decline in same-store sales. Most of that decline was driven by temporary closures at the onset of the pandemic. 

Once again In the U.S., same store sales at KFC increased 7% and Pizza Hut posted a 5% gain in same-store sales. So, do you want to know what steps our grocerant guru suggest for to drive new electricity, top line sales, and bottom-line profits at Yum Brands.  Well, I guess you will have to call him, engage him.  

Invite Foodservice Solutions® to complete a Grocerant Program Assessment, Grocerant ScoreCard, or for product positioning or placement assistance, or call our Grocerant Guru®.  Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche. Contact: Steve@FoodserviceSolutions.us or 253-759-7869