Taco Bell, KFC sales down as customers push back against rising fast food prices
By Jake Beardslee · February 7, 2024
- Taco Bell, KFC and Pizza Hut sales slowed more than expected in latest quarter
- Taco Bell saw steep drop from 11% same-store sales growth a year ago
- Yum CEO cites conflict in Middle East as partial cause of sluggish growth
- Results mirror other chains as inflation hits frequent fast food customers
Taco Bell and other fast food chains owned by Yum Brands are feeling the pinch as consumers push back against rising menu prices. According to a recent earnings report, sales growth has slowed at all three major chains - Taco Bell, KFC and Pizza Hut.
Taco Bell in particular saw a steep decline, reporting same-store sales growth of just 3% in the fourth quarter of 2023. This is a major slowdown from 11% growth a year earlier when new menu items like a revamped breakfast lineup fueled sales. Pizza Hut’s U.S. sales slid 4% and KFC saw flat growth, with all missing analysts’ expectations.
Overall same-store sales for Yum Brands grew just 1%, well below the predicted 3.9% increase. In a call with analysts, CEO David Gibbs cited “conflict in the Middle East region” as one factor impacting sales, with varying impacts across different countries, CNN reported. He said the trend has continued into early 2023 but is expected to improve over the course of the year.
The disappointing results mirror those from other fast food chains like McDonald’s as inflation hits lower-income consumers who make up a crucial part of the customer base. While grocery prices rose 1.3% overall last year, dining out jumped 5.2% - putting pressure on frequent fast food customers. However, Gibbs expressed confidence that Taco Bell in particular is “doing a great job of holding onto them.”
The sluggish growth points to ongoing challenges for major fast food brands as customers scrutinize their spending. Taco Bell, KFC and Pizza Hut will likely need compelling new menu options and deals to attract budget-conscious diners in 2023.