Financing

Yum Brands goes big into kiosks

The owner of KFC, Taco Bell and Habit Burger is bringing in the self-ordering devices as its digital system sales hit $30 billion.
KFC kiosk
KFC is adding more kiosks in U.S. and global stores. | Photo: Shutterstock.

Taco Bell customers are apparently growing more accustomed to kiosks.

The Mexican fast-food chain generated 31% of its sales from digital channels in the fourth quarter last year, and the self-ordering devices were a big part of that growth. Sales from in-store kiosks as a percent of sales increased 15 points during the period, executives with parent company Yum Brands said on Wednesday.

Unsurprisingly, Yum wants a lot more of these.

The Louisville, Ky.-based fast-food operator, which owns KFC and The Habit Burger Grill, along with Pizza Hut as well as Taco Bell, is making a big push to put more of these kiosks in more restaurants around the globe.

Habit, for instance, quickly rolled out kiosks in its restaurants last year. And now the chicken chain KFC is doing the same, both in the U.S. and internationally.

The chicken chain has kiosks at 500 U.S. locations. And the company increased the number of kiosks internationally by 70% over the past year. Its Latin America markets, for instance, plan to triple the number of restaurants with them this year.

“Kiosks remain an important priority in delivering a consistent customer experience, driving ticket uplift and streamlining our operations,” Chris Turner, Yum Brands’ CFO, told analysts on Wednesday.

Digital has become a huge theme throughout the restaurant industry and Yum has been among the more aggressive.

Yum generated $30 billion in system sales last year through its digital channels, which include mobile and web ordering, delivery and kiosks. That’s 45% of the company’s total system sales last year.

It’s also more than the global system sales for Burger King.

Digital sales played a big role in the company’s 10% global system sales growth for the year.

Yum Brands and many other fast-food chains like kiosks for a variety of reasons. They typically generate higher sales than counter service, because consumers spend a bit more time at the devices without worrying about the person behind them or the worker in front of them. They are also more likely to generate add-on sales because the devices always suggestive sell.

In addition, they take tasks away from employees, making the devices more profitable overall.

But that’s not the only digital strategy Yum is taking. The company has a global data hub that it uses for its brands, providing transaction-level sales data and various operational and customer metrics, Turner said.

The company plans to test new AI capabilities that use data from that hub and integrate it with various digital platforms, including menu pricing recommendations and restaurant routines for general managers.

For Yum, these digital capabilities drive more profit growth. “As these capabilities become more mature, we get more leverage out of those capabilities,” Turner said. And, he said, the efforts help franchisees at a lower cost, because Yum made the investments.

The efforts also create something of a digital virtuous cycle, helping Yum attract digital talent that then develops more ideas on the digital front.

“The talent we’ve been able to attract to the digital space, both at Yum and the brands, is unbelievable,” CEO David Gibbs said. “We are becoming a talent magnet in digital.”

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