IRVINE Calif. Taco Bell, in a new turnaround push, is doubling its product introductions, shortening the test process for possible rollouts and issuing coupons for the first time in five years, according to analysts who attended a presentation hosted Wednesday by parent company Yum! Brands Inc.
During the meeting here, officials of the Mexican quick-service chain also reportedly aired plans to use more promotions like this week's World Series-related taco giveaway, which was widely covered in the media. One report said the chain gave away $1 million in free tacos.
Taco Bell also plans to test a new frozen beverage and develop some "better-for-you," health-oriented items, according to a report from Jeffrey A. Bernstein, restaurant analyst for Lehman Brothers in New York and one of those who attended.
Bernstein also said in his report that Taco Bell would try a new "explore in store" system for testing new products. The new item would be tried in a few units outfitted with point-of-purchase promotional signage. If the number of orders soars, the item would be rolled out quickly, shortening the test process considerably, analysts said they were told.
At the meeting, company officials attributed Taco Bell's recent sales slump in part to an E. coli outbreak late last year that sickened 70 people, as well as widespread coverage of a rodent infestation at a New York unit in early 2007. The executives also said the 6,000-unit chain did not respond quickly enough to heightened consumer interest in value.
Taco Bell's speed of service is tracking well, the officials said, but they plan to focus on improving accuracy. The company also said it would introduce new lower-cost designs for franchised unit upgrades.
Yum also operates and franchises the Pizza Hut, KFC, Long John Silver's and A&W brands.