Making life easier the next time you order those Nachos BellGrande or Crunchwrap Supreme has been a consideration of Taco Bell Corp. for some time now.
How to deliver accurately and quickly is the mainstay of any quick-serve restaurateur. COVID-19 only highlighted that fact, while also accelerating the industry’s need to be on-point with a more acute focus on public safety now on the table.
Get it right and Taco Bell wins points in the minds of consumers—and also pushes further along in ambitious plans set forth by Chief Executive Mark King, since the former Adidas and TaylorMade executive came on board last August to head OC’s largest restaurant operator.
Irvine-based Taco Bell, with $11.7 billion in 2019 sales across 7,000 restaurants, wants to get to $20 billion in sales with over 10,000 locations worldwide.
Those are targets set pre-pandemic and they haven’t changed, King told the Business Journal.
“We are using this opportunity to accelerate the work we already had in place—from enhancing our digital footprint to leveraging customer data to improving the customer experience,” King said.
The CEO further teased additional news on that front as coming “sooner than you think,” he said.
Learning on the Fly
Clearly, the upcoming new strategy will lean on multiple tactics.
Pushing ahead with new concepts such as the Taco Bell Cantina, a restaurant offshoot currently counting some 30 locations, featuring a more modern design and alcoholic beverages, is one example. But perfecting the existing experience—quite simply, getting food to people quickly and correctly—is continuing to evolve.
Part of those improvements come from learnings of the past two months, in which all companies were tasked with reaching new levels of innovation not thought possible in such abbreviated periods of time.
“In all my years in business, I’ve never seen the world in these circumstances,” King said of the past two months.
Analyzing the data and listening to feedback helped the chain make changes quickly, he added.
“There are two distinct advantages for Taco Bell coming out of this,” King said of lessons learned from the quarantine.
“First, we’re a leader in drive-thru service, and we’ll continue to lean into evolving that experience to exceed our customers’ expectations.
“Second, we are listening to our customers’ needs in real time, and can quickly adjust our operating system, which is incredibly flexible and accommodating. We’re thinking through how we can have physical distancing in our dining rooms. This, along with an increased frequency of [cleaning for] high-touch and self-service areas, are only pieces of our post-pandemic precautions.”
Ease-of-Use
Early reads researching the shifts in consumer behavior the past few months indicate people want things that “make life easier and safer” in the post-pandemic environment, King said.
More specifically for Taco Bell, that comes down to continued improvement on delivery, mobile ordering and curbside pickup, which helped the chain when shelter-in-place orders shut down dining rooms.
It worked with Taco Bell notching a 4% gain in sales and a 1% gain in same-store sales in the March quarter for parent Yum Brands Inc. (NYSE: YUM) of Louisville, Ky.
Yum also owns the KFC and Pizza Hut brands, in addition to Irvine’s Habit Burger, which was brought into the fold earlier this year after a $375 million deal.
Taco Bell was the only segment of Yum’s to see gains during a quarter Yum Chief Executive David Gibbs said reflected “two different realities” as the pandemic bit into upward trajectories for many companies at the start of the year.
For restaurants, mobile, drive-thru and curbside pickup became important channels to lean on to service consumers during the quarantine.
“I foresee ordering ahead and curbside to continue to increase, and the strength of our business model is our drive-thru service, which will continue to be the biggest piece of our business,” King said.
“More and more, customers are ordering ahead through our app, which creates a contactless experience in the drive-thru.”
Safety First
During the shelter-in-place orders a number of safety measures, made in conjunction with franchisees, were launched.
Back-of-house changes were made to limit direct contact in the drive-thrus. For example, the employee who holds the credit card reader for consumers in the drive-thru does not touch the sealed bag of food going to that same customer, in a move that created one of many new roles for the chain.
To that end, Taco Bell recently said it was hiring some 30,000 additional workers this summer across its company-owned, franchised and licensed restaurants to accommodate the additional tasks needed to ensure safety and service.
The company already employs some 4,000 in OC.
Value Proposition
Value will be just as important now, too, as states slowly reopen.
The concept has always defined fast food. The pandemic’s only “magnified” that desire, King said.
Taco Bell more recently released the At Home Taco Bar for as many as six people, moving in line with many restaurant operators offering meal deals for those eating at home with family or roommates.
“Value will be more important than ever to Americans, and the QSR industry has the opportunity to provide people with meal solutions that fit their budgets,” King said on the subject of trends that will drive the industry through the rest of the year.
“I also predict there will be a lot more deal-based offers in this category, and we’ll see an uptick in promotions using digital platforms to help drive transactions at the restaurant level.”
King called the pandemic an “unprecedented time” that’s “been full of rapid change and evolutions,” calling out franchisees and workers for implementing and adhering to the raft of health and safety protocols required of operators.
King added: “It’s an honor to lead this brand that is all about our people.”
