Taco Bell's parent company is trying to sell confidence along with chalupas. Yum Brands said Thursday that Taco Bell's US sales slipped 2% in the current quarter as a nationwide cyclospora outbreak tied to lettuce rattled customers, but executives insisted the hit will be short-lived and that early signs of a rebound are emerging, Axios reports. CEO Chris Turner acknowledged a "meaningful near-term sales impact" but said Taco Bell's mix of "brand buzz, innovation, value, and digital" is its "magic formula" for recovery.
The chain pulled lettuce from supplier Taylor Farms after health officials logged more than 11,000 confirmed or suspected parasite cases that can cause severe gastrointestinal illness; Taco Bell hasn't said if it will keep working with the company, which maintains its food safety systems are sound. Turner said Taco Bell's quick action and clear communications have helped win customers back, as have daily deals like $1 Mexican pizza, the AP reports. The item usually costs $5 to $7. "With respect to the consumer sentiment, we've seen real improvement as consumers have understood better the nature of the issue," Turner said. "They understand that it is not a Taco Bell-specific issue."
Analysts and franchisees expect pressure on sales to linger through at least year-end, with traffic data showing a sharp drop. The company said Taco Bell sales hit a low the weekend of July 18 but they have been steadily improving since. Before the outbreak, the chain was one of the best performers in the fast-food industry, with sales rising 7% in the quarter that ended June 30, the Wall Street Journal reports.
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