Taco Bell Accelerates International Growth and Targets $20 Billion in Annual Sales

People eat at a newly opened Taco Bell restaurant in Beijing on August 21, 2020.

Greg Baker | AFP | Getty Images

Taco Bell is accelerating its growth outside the United States, opening 25% of its international restaurants in the past two years alone.

The Yum Brands chain announced on Tuesday that it had opened its 100th restaurant in Spain. The chain said it was on track to build 1,000 international units, although it did not share a timeline for achieving that goal. At the end of 2020, approximately 8% of Taco Bell’s 7,427 restaurants were located outside the United States

In its home market, Taco Bell has built up a solid following of loyal fans, who even marry at its Las Vegas location. Fans include Vegetarians, whose vocal disappointment with menu cuts helped bring back its potato options last year. Still, the chain’s U.S. operations have taken longer than Yum’s other two big brands, KFC and Pizza Hut, to rebound from the pandemic. The loss of late-night and early-morning demand hurt Taco Bell’s sales.

While Yum reports system-wide sales growth by country for Pizza Hut and KFC, the company does not detail those results for Taco Bell. In the fourth quarter, Taco Bell reported comparable store sales growth of 8% across all of its locations.

“We’re on track to reach 1,000 stores, and that’s in our sights for the very near future,” said Julie Felss Masino, international president of Taco Bell, in an interview.

She added that Taco Bell CEO Mark King has set a goal for the chain to hit $20 billion in annual revenue, and international growth is an important part of achieving that goal.

Felss Masino became head of Taco Bell’s international operations in January 2020, after two years leading the chain’s U.S. operations following the departure of Brian Niccol for Chipotle Mexican Grill. Under his leadership, Taco Bell’s international division focused on several key markets: Spain, UK, India, Australia and New Zealand.

Taco Bell’s international strategy includes betting on digital orders. In the UK, 60% of transactions come from online customers. The chain has opened digital-only venues and restaurants with dedicated pick-up counters for delivery drivers.

“That’s what an easy and accessible brand is, and it’s the cornerstone of our international growth,” said Felss Masino.

Unlike its operations in the United States, all of Taco Bell’s international locations are operated by franchisees. Some of these operators have been part of Yum for decades, running KFC or Pizza Hut restaurants in their country.

“We worked with our franchise partners to scale very quickly,” Felss Masino said. “Scale helps consumers because the brand feels bigger, it’s something they want to be a part of. Sometimes we can bring more to market with marketing.”

Felss Masino also said Yum’s scale and expertise helped Taco Bell accelerate its international growth. Yum is the largest restaurant company in the world by number of locations. In 2021, Yum opened more than 4,100 locations worldwide, which is more than the number of Tim Hortons locations in Canada.

Shares of Yum are up 14% over the past 12 months, giving the company a market value of $35.5 billion.

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