Taco Bell Plans 2,000 More Restaurants by 2022 -- and Some Are Bars Too

The fast-food titan Yum! Brands wants to be your local dive bar.
By Brian Sozzi ,

Editors' pick: Originally published July 12.

Taco Bell still sees a future where it's your local dive bar.

The taco and burrito seller's parent company, Yum! Brands (YUM) - Get Report , said Tuesday it will open a flagship 24-hour "Cantina" restaurant in the heart of the Las Vegas strip this fall. The restaurant will serve alcoholic beverages such as beer, wine and sangria alongside the chain's standard cheap Mexican grub and new tapas-style small-plate offerings.

Taco Bell opened its first Cantina restaurant in Chicago last September, followed quickly by one in San Francisco. Patrons at the restaurants have the opportunity to guzzle down a $4.50 glass of craft beer from New Belgium Brewing or a $4 Dos Equis, as well as wine, sangria and frozen alcoholic drinks called "Twisted Freezes."

At the time of its initial launch, the company planned to open eight Cantina locations within the next year. The Vegas spot will increase the number of Cantinas to three within a portfolio of over 6,400 Taco Bell restaurants.

A spokesperson for Taco Bell said it plans to open 2,000 new locations by 2022, of which 200 will be urban locations. It was unclear if those 200 will be alcohol-serving Cantinas. 

The slower pace of openings for Cantinas may reflect how hard it is to crack urban markets with a new fast food restaurant brand, given high rent and wage costs and the competition from popular local eateries. For the Cantina concept specifically, it's going up against any number of well-frequented local hipster joints that serve booze and group-friendly small plates.

One of four new Taco Bell restaurant designs being tested in California.

An urban-chic Cantina that caters to the up-all-night partiers in Vegas comes on the heels of Taco Bell unveiling several new restaurant designs this summer in California. The remodels are part of a bid to up its cool factor over time.

All of the fresh layouts feature communal tables with multiple metal seats, which are ideal for handling large groups. Cushioned reclining chairs encourage taco lovers to stay a while and listen to some music on an iPhone. Pendant light fixtures jazz up the look of the restaurant. One layout even boasts outdoor seating. The new designs look hip.

The Mexican-themed fast-food joint, after an impressive 2015, notched a meager 1% increase in same-store sales in the first quarter, below the consensus estimate for a 3.1% gain. The result was noticeably slower than the 4% increase seen in the fourth quarter, and well off the strong 6% gain logged last year.

Yum! Brands will announce its second-quarter results after the close of trading Wednesday.

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