Taco Bell, KFC, Pizza Hut to focus on deliveryTaco Bell, KFC, Pizza Hut to focus on delivery

Taco Bell and KFC may introduce delivery this year, and sister brand Pizza Hut is working on a “next generation” delivery experience scheduled to roll out next year, officials with parent company Yum! Brands Inc. said.

“I am very excited about delivery,” Yum CEO Greg Creed told analysts at the Bernstein Strategic Decisions Conference in New York on Wednesday.

This year, Taco Bell will start testing delivery on college campuses. The Irvine, Calif.-based chain is talking with a number of delivery companies to evaluate the best plan of attack. Earlier this year, Taco Bell CEO Brian Niccol said delivery was in the works.

Taco Bell delivery will likely only be available on Thursday, Friday and Saturday nights, which is what customers are requesting, Creed said.

“If we’re going to do delivery at Taco Bell, we are not going to establish some sort of call-center base, like at Pizza Hut,” Creed said. “We’re not going to deliver lunch or do delivery every day of the week.”

Delivery still presents a huge opportunity, Creed said.

“Our ability to deliver Taco Bell would be a massive sales driver for the brand,” he said.

However, Taco Bell’s food doesn’t lend itself well to delivery because many items have both hot and cold ingredients, Creed noted.

Better suited is Louisville, Ky.-based KFC, which will also consider offering delivery in the U.S. this year. The quick-service chicken chain offers delivery in some international locations, he said.

“The great thing about buckets of chicken is that it holds its temperature incredibly well,” he said.

Meanwhile, Pizza Hut, long known for delivery within Yum’s portfolio, is going through a shift in mindset.

As part of ongoing efforts to revamp the brand, Pizza Hut is making a fundamental shift from offering restaurant-based delivery to being a delivery-based restaurant, Creed said.

In Dallas, for example, Plano, Texas-based Pizza Hut has opened two modular restaurants that offer only delivery and carry-out through a drive-thru window.

“We can add a module for dine in, if we feel like it. But that’s the reverse of what we’ve done in building those red roofs, from which we did delivery,” he said, referring to Pizza Hut’s traditional red-roofed restaurants.

Pizza Hut has not kept up with competitors in terms of delivery technology, Creed said.

One step is to shift focus from the call center for delivery to online and mobile. More than 40 percent of Pizza Hut orders come from online now, he said, but competitors do a better job.

“That’s an area we have to improve, both the ordering experience and the delivery experience,” he said. “There’s no doubt our competitors do a better job than us right now, so we’re clearly focused on what is the step change in that area.”

There are technology issues to overcome, he noted. Currently, Pizza Hut restaurants throughout the chain use nine different point-of-sale systems, which makes creating an app difficult. The chain is moving to one POS system that will be a catalyst for transforming the experience, he said.

In the third quarter, restaurants in Dallas will begin testing a “next generation” delivery program that the company will likely roll out in 2016, Creed said.

The delivery experience is being tested in Russia, and is a “technological step up,” he said, though he declined to offer details.

Delivery has been a growing focus throughout the industry. Limited-service brands like Starbucks, McDonald’s and Chipotle Mexican Grill have launched or are in the process of rolling out delivery this year.

Louisville, Ky.-based Yum operates or franchises more than 41,000 restaurants in more than 125 countries under its three core brands.

Contact Lisa Jennings at [email protected].
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