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Taco Bell accelerates international growth as chain aims for $20 billion in annual sales

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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 U.S., opening 25% of its international restaurants in just the last two years.

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

In its home market, Taco Bell has built a strong following of loyal fans, who even get married at its Las Vegas location. Fans include vegetarians, whose vocal disappointment in menu cuts helped bring back its potato options last year. Still, the chain’s U.S. business took longer than Yum’s other two large brands, KFC and Pizza Hut, to bounce back from the pandemic. The loss of late-night and morning demand hurt Taco Bell sales.

While Yum reports systemwide sales growth by country for Pizza Hut and KFC, the company doesn’t break out those results for Taco Bell. In the fourth quarter, Taco Bell reported same-store sales growth of 8% across all of its locations.

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

She added that Taco Bell CEO Mark King has set a goal for the chain to see $20 billion in annual revenue, and international growth is an important component to reaching that target.

Felss Masino became head of Taco Bell’s international business in January 2020, after two years running the chain’s U.S. operations in the wake of Brian Niccol’s departure to Chipotle Mexican Grill. Under her leadership, Taco Bell’s international division has focused on several key markets: Spain, the United Kingdom, India, and Australia and New Zealand.

Taco Bell’s international strategy includes betting on digital orders. In the U.K., 60% of transactions come from online customers. The chain has been opening digital-only locations and restaurants with pick-up windows dedicated to delivery drivers.

“That’s what being an easy, accessible brand is all about, and that’s a cornerstone of how we’re growing internationally,” Felss Masino said.

Unlike its U.S. business, all of Taco Bell’s international locations are run by franchisees. Some of those operators have been a part of Yum for decades, running KFC or Pizza Hut restaurants in their countries.

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

Felss Masino also said Yum’s scale and expertise has helped Taco Bell as it accelerates 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 — that’s higher than the number of Tim Hortons locations in Canada.

Shares of Yum have risen 14% over the last 12 months, giving the company a market value of $35.5 billion.

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