- Yum Brands is the parent company of Taco Bell, Pizza Hut, and KFC.
- The company opened over 4,100 new restaurants in 2021.
- Fast food brands are continuing to expand as demand remains despite inflation.
Yum Brands, the parent company of Taco Bell, KFC, and Pizza Hut, broke a fast food industry record in 2021 by opening 4,180 new restaurants.
That averages out to about one new restaurant every two hours for the entire year, CEO David Gibbs told investors in a Wednesday fourth-quarter earnings call.
Yum is the largest restaurant company in the world with more than 53,000 stores around the world. KFC alone has nearly 27,000 locations and is the fourth-largest chain in the world behind Subway, McDonald’s, and Starbucks.
“This speaks to the health of our business, iconic brands, capable, committed and well-capitalized franchise partners and strong unit economics,” Gibbs said in the call.
The fast-paced openings show that customers aren’t likely to give up fast food habits any time soon as executives continue to greenlight new locations.
Confidence in fast food extends beyond Yum’s holdings. Starbucks added nearly 1200 new stores in 2021, and plans to add another 2,000 in 2022. McDonald’s opened 650 new locations in 2021, with 1800 slated openings for 2022, including some in the US for the first time in years. Chipotle just increased its estimate for how many stores it could possibly run in North America from 6,000 to 7,000, an increase of over 16%.
Fast-food sales remain strong, even as prices keep going up and the biggest chains are eliminating value menu deals. Inflation has hit fast food, along with the rest of the economy, as ingredients and labor both become more expensive. US inflation was up 7% year-over-year in December according to the Bureau of Labor Statistics, the highest level since 1982.
Taco Bell, in particular, used to be one of the least expensive meal options in the industry, with an extensive value menu and items for $1. The Mexican chain had raised prices by 10% between July 2020 and July 2021, an analysis by Gordon Haskett found.
Since then, Taco Bell has focused on combo meals exclusively available online, and higher-priced limited-time items. The chain brought back the Grilled Cheese Burrito in November, which helped boost profits the first time it was sold in July 2020. Taco Bell also recently promoted wings for just one week, which were priced at $5.99 for five wings. This is an example of a menu shift, where a chain rolls out more expensive offerings while quietly taking cheaper ones off menus, Kalinowski Equity Research CEO Mark Kalinowski previously told Insider.
Menu shifts like the ones undertaken by Taco Bell don’t seem to be tamping down customer demand. Same-store sales were up at each of Yum’s major brands year over year, at 11% for KFC, 11% for Taco Bell, and 7% for Pizza Hut.
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