Taco Bell CEO Mark King, who just announced he will retire at the end of this year, led the brand through unquestionably the most challenging time in the restaurant industry in recent memory.
And he didn’t seem to miss a beat.
Since coming on board in August 2019, King held a steady hand through the pandemic, through an abruptly changed consumer set, and through historic unemployment levels, global uncertainties, and record-setting inflation. Taco Bell is stronger than it’s ever been, and it is strongly positioned to continue that momentum for the foreseeable future.
At the time of King’s hire, Yum Brands’ then-CEO Greg Creed called him an “accomplished retail innovator and strong culture leader.” Current Yum CEO David Gibbs, who then served as president, called King the “ideal executive to elevate Taco Bell to the next level of global growth.”
Indeed, under King’s leadership, Taco Bell has pushed the gas on development, both domestic and international, the latter of which reached the 1,000-unit milestone in 2022. Consider the following cadence since King came on board:
- Q4 2019 (King’s first full quarter): 191 gross new restaurants opened
- Q1 2020: 55 gross new restaurants in 9 countries
- Q2 2020: 22 gross new restaurants in 4 countries
- Q3 2020: 45 gross new restaurants in 9 countries
- Q4 2020: 93 gross new restaurants
- Q1 2021: 73 gross new restaurants in 9 countries
- Q2 2021: 91 gross new restaurants in 18 countries
- Q3 2021: 74 gross new restaurants in 15 countries
- Q4 2021: 195 gross new restaurants; Spain becomes the first Taco Bell International market to surpass 100 units
- Q1 2022: 63 gross new restaurants in 13 countries; Taco Bell begins publicly reporting U.S. system sales and international system sales separately
- Q2 2022: 82 gross new restaurants in 13 countries
- Q3 2022: 98 gross new restaurants in 16 countries
- Q4 2022: 253 gross new restaurants during the quarter
- Q1 2023: 79 gross new restaurants in 16 countries
But, as we mentioned Thursday, development is hardly the only feather in King’s Taco Bell cap. Let’s take a deeper look at some of his biggest wins. And pull up a chair, as there are several.
For starters, since Q4 2019, there has been just one quarter of negative same-store sales from the Taco Bell system. In Q2 2020, the company was down 8%, and we all know what was going on during Q2 2020. Perhaps the hardest win King earned was keeping the ship steady during the pandemic. During Yum’s Q1 2020 earnings call, Yum CEO David Gibbs gave a shout out to King, noting, “I’ve been really proud of how the Taco Bell team has reacted to this. Their business has had the most impact because they have a breakfast business, and they rely on late nights … But their core business drive-thru is perfectly designed for this time, and they are embracing the delivery and carryout model and I think Taco Bell is well positioned to get through this.”
And, despite that negative 8% comp in Q2, CFO Chris Turner called Taco Bell a bright spot on the quarter; a quarter in which most other brands spiraled deep into the negative double-digit range. Turner credited Taco Bell’s loyalty program launch, shift to group bundle promotions, an at-home taco bar, record store-level margins, as well as the chain’s strong relationship with its franchisees.
“Mark King and his team have done an amazing job to get the business on much more solid footing and with momentum right now,” Turner said in July 2020.
That momentum ramped up quickly, and Gibbs noted the very next quarter that the Taco Bell brand performance in Q3 2020 “is obviously something we’re very proud of.” Same-store sales were up 3% on the quarter, while operating margins were above 37%, driven by limited hours and a simplified menu.
“They’re getting through this in an admirable way,” Gibbs said.
In early 2021, Gibbs credited King for leading “one of the strongest franchise systems you will ever find,” and turned the spotlight to Taco Bell’s international and digital growth.
“We are leaning more into development as the unit economics look great right now. And our franchise partners are financially healthy and eager to go after [real estate opportunities]. The progress we have made over the last year on digital is also an important part of the Taco Bell story… That lays the foundation for more success going forward,” Gibbs said during Yum’s Q1 2021 earnings call.
Throughout the rest of 2021, Taco Bell experienced its best international development quarter ever, crossed the 7,000-unit milestone, ramped up the expansion of the tech-forward Taco Bell Go Mobile asset and launched its first-ever global brand campaign. The brand also relaunched breakfast in August 2021 and joined the chicken sandwich wars with a crispy chicken sandwich taco.
The beginning of 2022 brought forth a new Cravings Value Menu and the Taco Lover’s Pass subscription program, which drove loyalty memberships and frequency. It also marked the brand’s return to the Super Bowl with Doja Cat – its first of many cultural moments throughout the past year and a half. Doja Cat also supported the brand for the return of the Mexican Pizza, of which over 20 million were sold in a short period of time, while about 45 million were sold within four months.
In Q3 2022, Gibbs said, simply, “Taco Bell is winning, thanks to its ability to generate and amplify standout moments in culture and translate the resulting topline growth into impressive restaurant-level margins.”
Internationally, the chain’s development engine outpaced U.S. development for the first time in 2022 and contributed to Yum’s long-term growth algorithm of 4 to 5%. That said, the company exited 2022 with record site registrations for new units at Taco Bell U.S., as well.
And, almost to present day, Taco Bell’s Q1 2023 was highlighted by 8% same-store sales growth and 6% unit growth. Gibbs credited “years of sustained topline strength as the team executes on its consistent growth formula, which leverages the combination of brand buzz with unparalleled value offerings, buzz occasions and digital initiatives.”
Simply put, King checked a lot of boxes. Then he added more boxes and checked those, too. As he eyes retirement, he leaves a solid playbook and plenty more boxes for his successor, Sean Tresvant, to focus on. Among them? As he mentioned during Yum’s investor day in December, growing to the size of McDonald’s, which would mean nearly doubling its system; continuing to evolve the brand’s marketing to be “much more digital, personal” for consumers; getting light users to buy more products, or as he described, going from cult to culture; and so forth.
“What we know is there is a tremendous amount of upside for our brand,” King said in December. “And it’s really paying off because franchisees are opening restaurants.”
Contact Alicia Kelso at [email protected]