Taco Bell sales jump; more chicken on menu

YUM BRANDS

LOUISVILLE, KY. • Taco Bell says a concoction made with a deep-fried chicken “taco shell” helped lure customers into its stores, and noted that it’s planning more “Naked” chicken menu items.

The chain’s sales jumped eight per cent at established locations in the first three months of the year, which it credited in part to $1 menu items and its limited-time Naked Chicken Chalupa.

The results come as other chains have struggled to increase customer traffic in stores. McDonald’s and Starbucks earlier reported sales increases in the U.S., for instance, but said they were the result of higher pricing.

Already, Taco Bell is looking to build on the Naked Chicken Chalupa’s success, and this week rolled out fried chicken pieces shaped like tortilla chips served with a nacho cheese dipping sauce. “Let’s not kid ourselves, you’ll see more Naked products — we’d be crazy not to,” said Greg Creed, CEO of Taco Bell parent company Yum Brands.

Taco Bell’s sales performance helped Yum report a profit for the first quarter that beat Wall Street expectations. But results were disappointing at the company’s struggling domestic Pizza Hut business, which saw sales decline seven per cent.

The pizza chain has suffered in part because of its history as a chain of sitdown restaurants, at a time when people increasingly look for speed and convenience. Domino’s, by contrast, has enjoyed six years of quarterly sales growth in the U.S., including a 10-per-cent jump in the latest quarter.

To spark a turnaround, Yum said it recently struck an agreement with Pizza Hut franchisees in the U.S. intended to better align the business on marketing efforts and give the chain a “digital, delivery-centric focus.”