Digital Deployments Pay Off for Yum! Brands

Press enter to search
Close search
Open Menu

Digital Deployments Pay Off for Yum! Brands

By Anna Wolfe, Senior Editor - Restaurants - 02/11/2021
KFC US managed to improve transaction times by 16 seconds in Q4 over the year prior.

Accelerating digital and technology rollouts has reaped rewards for Yum! Brands. For 2020 Yum! Brands' digital sales increased 45% to top $17 billion.

“Despite the challenges of 2020, our full-year results demonstrated our resilience and validated the strategies we put in place during the transformation of Yum!. We intensified our focus on leveraging our scale and reinforcing our growth model, by accelerating our investments in digital and technology to enhance the customer experience and unit economics,” said David Gibbs, CEO, in an earnings statement.

Yum. reported results for the Q4 and for 2020 on Feb. 4. Same store sales declined 1%. Q4 earnings per share was $1.08, a decrease of 32%. 2020 GAAP EPS was $2.94, a decrease of 29%.  A full earnings report is available here.

Adapting, Compete, Win

As with other brands that pivoted to off-prem during the pandemic, Yum! Brands also saw a dramatic increase in digital sales in 2020 vs. the prior year. 

Many of its Taco Bell, KFC and Tim Hortons brand operate drive-thru, a format that has fared well during the pandemic. Chris Turner, CFO, said “Q4 results are evidence our brands remain effectively positioned to win in an off-premise environment and that our business model is positioned for sustained rapid growth once we emerge from the pandemic.

In an earnings call with analysts, Gibb said, “Across Yum!, we intensified our focus on leveraging our scale … This includes accelerating our deployment of digital and technology initiatives to enhance the customer experience, off-premise capabilities and unit economics across the globe. We now have over 35,000 restaurants offering delivery, representing a 16% increase year-over-year, in part driven by expanded aggregator partnerships.

Across the enterprise, 98% of locations systemwide are open. About 7% of The Habit locations are closed; however, same-store sales declined only 5%. Gibbs says is quick to credit the brand’s digital ordering platform, “which continued to perform well, constituting over 40% sales mix.”

The Habit Burger Grill “aggressively” rolled out off-premise solutions in 2020, such as pop-up drive-thrus and curbside pickup. “Curbside in particular has continued to be well received by customers accounting for over 10% of total sales and about 50% of mobile orders,” said Gibb.

Drive-Thru

Drive-thrus have dominated off-prem across the industry. Most of KFC U.S. sales are occurring in the drive-thru these days, Gibbs noted. As it strives for continual excellence, the brand managed to improve transaction times by 16 seconds in Q4 over the year prior. 

Taco Bell U.S. also posted ”record breaking drive-thru performance and with consumer demand in our drive-thru at an all-time high achieved its goal of completing a full year with transaction times below four minutes with the fastest quarterly average achieved in Q4,” he added. During the quarter, Taco Bell U.S. digital sales mix reached 12% for the quarter and about $1 billion for the full year 2020.

Pizza Hut UK is piloting an in-house intelligent coaching app called HutBot to improve shift level store performance. “After launching HutBot and other process improvements in the UK, delivery times improved over six minutes and drove a 20-point improvement in customer satisfaction scores,” said Gibb.