June 29, 2017
Taco Bell Looking to Expand Abroad, Despite Difficulties

Taco Bell, the Mexican inspired fast food chain, is looking to add more locations abroad, as the chain faces a saturated fast food market in the U.S., according to Bloomberg.

The chain owned by the Yum Corporation, has 280 locations abroad and wants to bring that number up to 1,000 by 2020 said Melissa Lora, president of Taco Bell's international markets. Their main focus is to expand in Asian and European countries.

"There's a really strong pull for Taco Bell to come to different countries," said Lora. "There is a growing familiarity outside the United States with Mexican food."

However, out of Yum's other brands, Pizza Hut and KFC, which have thousands of restaurants around the world, Taco Bell has a relatively small number of international locations. This is due to the fact that Mexican food isn't as well known abroad, unlike fried chicken. Taco Bell's first location outside of the U.S. was in Guam in 1977, and locations have since been opened in the U.K., Costa Rica, and most recently Japan. It is said that when Taco Bell enters a new country, they tend to offer a smaller menu and have open kitchens in order for diners to see their food being prepared.

Yum had brought Taco Bell to China and had at least one location in Shanghai, but it wasn't successful. However, as of late 2014, China boasts 4,828 KFC locations and 1,572 Pizza Hut locations.

On Thursday, Yum! announced that they can deliver high profits for shareholders after it was decided that the chain would split into two publicly traded companies. They decided that one of the companies would be focused just on China, and the other would focus on the rest of the world. Both are said to deliver a 15 percent return-on-investment annually.

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Taco Bell has experimented with many different concepts over the years including cantina style locations. (Photo by Scott Olson/Getty Images)

"We believe this transaction is a classic example of 'one plus one equaling more than two' as it will enable each company to realize its full potential and achieve greater value on a standalone basis," said Greg Creed, CEO of Yum Brands.

On Thursday, Yum's stock was 0.41 percent and down to $73.50 in pre-market training, after the company reported there was a decline in same-store sales in China. In USA Today, it was reported that stores open at least a full year in China dropped to three percent in November.

The company also made an announcement for a potential listing in Hong Kong by Yum's China unit, as part of the plan, according to Forbes. This would make the company's shares available to mainland Chinese investors, and give the company a more Asian spin, as opposed to "a downscale purveyor of greasy western fast food."

Meanwhile, on the domestic side, Taco Bell has opened a new "stand alone" location last week in South Boston, Va. According to The Gazette-Virginian, its first customer Bosons Bennett received a basket filled with Taco Bell breakfast food and a year of free breakfast combos. This location is owned and operated by the Martinsville, Va. based Tacoma, Inc., which is a franchisee of the Taco Bell Corporation.

"We're so pleased to provide another location in the South Boston area to meet the across town need," said Geneva Carrington, the general manager of the branch. "The response has been terrific. We're seeing so many new faces."

In an article for The Wall Street Journal, Julie Jargon reported that Taco Bell "has been a bright spot" for Yum! with successful products like the Doritos Locos Tacos and the breakfast menu. The chain has experimented with catering, delivery, and opening trendy Cantina restaurants in urban markets like Chicago and San Francisco. Greg Creed hinted at the possibility of opening hundreds of Taco Bell Cantina style restaurants in the next few years.

[Photo by Chris McGrath/Getty Images]