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Dive Brief:

• Taco Bell’s U.S. same-store sales rose 5% in Q2 2024, while Yum Brands’ other U.S. brands — Pizza Hut, KFC and Habit Burger Grill — posted declines of 1%, 5%, and 6%, respectively, according to Yum’s earnings report.
• A combination of the chain’s value perception and menu changes drove the sales growth, David Gibbs, Yum’s CEO, said on the company’s earnings call. In particular, two limited-time offers — the Big Cheez It items and Nacho Fries with Secret Aardvark Hot Sauce — and its Cantina Chicken menu, which launched in March, were particularly successful at driving sales.
• Taco Bell’s sales growth was distributed across all income cohorts and the chain didn’t see a drop off in consumer traffic like that experienced by chains like McDonald’s last quarter.

Dive Insight:

Gibbs said the Cantina menu had driven the sales mix for chicken up by 10 points and that roughly a quarter of orders included a Chicken Cantina menu item. The chain plans to use the Cantina menu as a platform off which to innovate, Gibbs said, adding that the chain just launched the Cantina Chicken Cheese Street Taco Chalupas in Q3, which is “off to a good start.”

But the premium menu slate wasn’t the only driver of sales at Taco Bell. Gibbs emphasized the significance of the chain’s Cravings Value Menu, a 10-item, value-focused menu the chain launched earlier this year.

“They're unique items that nobody else in the industry has. They're not Junior-sized versions of a core item,” Gibbs said of the Cravings Value Menu items. “They stand in their own right. They're incredibly craveable. That has served us well, and it really puts a moat around us when it comes to value.”

Taco Bell has continued adding limited-time menu items and value deals this summer. Its $7 Luxe Box launched as an LTO in the waning days of Q2, and has persisted into Q3. The Luxe Box offers a 55% discount over purchasing the included items separately, according to the press release announcing its introduction. The chain also added Cheesy Street Chalupas as a premium LTO in mid-July.