Yum! Brands needs more time to set up delivery at Taco Bell, KFC
LOUISVILLE, Ky. (WDRB) – Yum! Brands needs more time to deliver answers to Wall Street about the company’s foray into delivery at KFC and Taco Bell.
Executives with the Louisville-based fast food giant repeatedly declined on Thursday to detail the progress of the partnership Yum announced in February with Chicago-based delivery startup Grubhub.
Stock analysts peppered Yum executives with questions including how many KFC and Taco Bell stores are on Grubhub’s platform, average wait-times for delivered food and how delivery has affected overall restaurant sales.
“This is very early; we are in test (mode),” CEO Greg Creed said during the company’s quarterly earnings call.
He said only a “small number” of stores have added delivery and the companies want to fine-tune technical details before making a big push to get customers to try ordering through Grubhub’s smartphone and desktop platforms.
“We would rather get the integration done right, test the integration (and) then unleash the marketing dollars,” Creed said.
Yum said in February that it would invest $200 million in Grubhub as part of a five-year partnership, providing cash for the young company to expand its footprint and integrate thousands of KFC and Taco Bell stores into its system.
Creed said in February that Grubhub was testing delivery with KFC stores in Louisville as well as in Indianapolis and Omaha, Nebraska.
On Thursday, Grubhub’s website showed delivery available from 14 Louisville-area KFC restaurants with waits ranging from 35 to 55 minutes. The delivery charge was listed as $3.99, up from $2 in February.
Yum chief financial officer David Gibbs told analysts the company has more work ahead to reduce delivery times and order errors, but he said the company has “sophisticated” capabilities from its long experience in delivery at Pizza Hut.
“We know ultimately the kinds of times and accuracy that you need to deliver in delivery. We’re not there yet, but we’re on the path to getting there,” Gibbs said.
Yum reported Thursday that KFC and Taco Bell stores open at least a year saw sales increase 2 percent during the April-June period, compared to a year earlier. Pizza Hut’s same-store sales were down 1 percent.
The company reported earnings of $321 million during the quarter, slightly topping analyst expectations.