Taco Bell's sales grow, thanks to Mexican Pizza and Pete Davidson

Same-store sales at the Mexican fast-food restaurant chain rose 11% in the fourth quarter. The company sold 45 million Mexican Pizzas last year. And breakfast improved following new ads featuring the comedian.
Taco Bell sales
Ads featuring comedian Pete Davidson helped drive breakfast traffic at Taco Bell in 4Q. / Photo courtesy of Taco Bell.

Mexican Pizza was an apparent winner for Taco Bell last year. So was Pete Davidson.

The quick-service Mexican chain’s same-store sales rose 11% in the U.S. in the fourth quarter, after it reintroduced the cult favorite product back to its menu and breakfast sales recovered, parent company Yum Brands said on Wednesday.

The result wrapped up a strong year for Taco Bell, where same-store sales grew 8% in the U.S. and 7% internationally. Taco Bell operates 8,200 locations worldwide and is one of the biggest chains in the U.S.

Taco Bell returned its Mexican Pizza to the menu permanently in September. The company sold 45 million of the popular cult product during the full year, Yum Brands CEO David Gibbs told investors on Wednesday.

In addition, breakfast transactions increased by 9%. The company credited its ad campaign marketing the daypart featuring the comedian Davidson, who served as a spokesman as Taco Bell reconfigured breakfast to focus on more classic favorites, notably the Breakfast Crunchwrap.

Company margins at Taco Bell were flat last year despite “industry-wide cost pressures,” Gibbs told investors on Wednesday.

Sister brand Pizza Hut, meanwhile, continued a healthy run of sales in the U.S. Domestic same-store sales rose 4%, Yum Brands said on Wednesday. They declined 1% internationally, with much of the problem rooted in China, where system sales declined 6% amid COVID surges there.

Yum executives credited the company’s new Melts product, which generated sales among lower-income diners because of their value. They also said marketing campaigns by Uber Eats and DoorDash helped drive sales from third-party delivery companies up 30% in the period.

At KFC, same-store sales rose 1% in the U.S. in the fourth quarter and declined 1% for the full year. Internationally, same-store sales rose 6%. The company opened more than 800 locations globally over the past year and now operates 27,760 restaurants worldwide.

Same-store sales at Habit Burger, the company’s fast-casual burger chain, declined 1%, the company said.

Yum Brands has been on a push to aggressively open new locations for all its brands around the country. The company opened 4,500 “gross new units,” or 3,100 net units factoring in closures. Yum Brands executives earn special bonuses based on unit growth.

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