
Taco Bell's Store of the Future Wants You to Stop Eating in Your Car
Taco Bell would really like it if you didn't always enjoy a cheesy chalupa from the comfort of your car.
The fast-food taco and burrito giant owned by Yum! Brands (YUM) - Get Report , which operates over 6,400 locations in the U.S., will begin testing several new restaurant designs this summer throughout Orange County, Calif.
The four concepts, dubbed Modern Explorer, California Sol, Heritage and Urban Edge, will be brought to life in the remodeling of four Taco Bell restaurants near Taco Bell's California headquarters. All four concepts are a big-time departure from the generally sterile dine-in experience at Taco Bell, whose claim to fame through the years has been that it pumps out affordable Mexican themed fast-food through drive-thru windows.
"We've taken a very close look at the consumer mindset -- for a long time, consumers sought out conformity, which allowed a sense of consistency of quality and service, but today, it's no longer one size fits all," explained Deborah Brand Vice President Of Development and Design for Taco Bell in an interview with TheStreet, adding, "Consumers are looking for more localized and personalized experiences, which is exactly what these designs bring."
But the message to consumers from all of the concepts is quite apparent: Please come inside and, in the process, maybe get enticed to spend a little bit more.
Taco Bell's "Urban Edge" design is a hipster foodie's wet dream, sort of.
Communal tables with multiple metal seats, ideal for handling large groups, are scattered about. 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. For the California Sol design, there is outdoor seating to proudly show off $5 nachos to passersby.
"We know our consumers already leverage our restaurants for date nights, birthday parties and meet ups, and we think amenities like free wi-fi, communal space and a more localized and personalized feel will help amplify those amazing experiences," said Brand.
The traditionally tiny drive-thru window has been scrapped -- in its place is a giant glass drive-thru wall that allow people to see inside the restaurant and perhaps venture in. And taking a page out of Chipotle (CMG) - Get Report , people can see their food being prepared because the entire kitchen is open.
"This is all part of the "fast casualization" of the quick-service restaurant business," said David Henkes, senior principal at research firm Technomic, adding, "Upscale décor is pretty common among fast-casual restaurants, and Taco Bell is looking to recreate some of the success that those types of operations have seen."
The inevitable buzz surrounding the fresh look comes at an opportune time for Taco Bell.
Hot off an impressive 2015, Taco Bell notched a meager 1% same-store sales increase in the first quarter, below the consensus estimate for a 3.1% gain. Sales were noticeably slower than the 4% increase seen in the fourth quarter, and well off the strong 6% gain logged last year.
Yes, that it outdoor seating at a Taco Bell.
"Taco Bell faced increased value pressure from the burger chains in the first quarter," said Yum! Brands interim Chief Financial Officer David Russell to analysts on a conference call. Russell added, "Same-store sales improved throughout the quarter, and we remain confident in achieving 3% same-store sales growth for the year, with a stronger second half than first half."
Taco Bell is the latest Yum! Brands concept to catch a design overhaul in effort to attract people heading off to popular fast-casual restaurants.
Pizza Hut, which currently operates over 6,000 restaurants in the U.S., recently opened several newly redesigned restaurants in Texas. Decked out in Pizza Hut's trademark red and black colors, albeit with deeper hues, the locations feature wraparound windows, outdoor seating and, yes, a drive-thru. The locations also serve beer and wine, which don't appear to be on the menu at the new Taco Bell concepts.
Outdoor seating has arrived to Pizza Hut, too.
Pizza Hut plans to remodel roughly 700 of its U.S. stores a year through 2022 in the new format.
At KFC, by the end of 2016 it expects 25% of its over 4,500 U.S. restaurants to be in a sleeker new design that features bolder exterior colors and more communal seating inside. The number of locations in the fresh format is seen reaching 70% by 2019.
Colonel Sanders would be proud of the new look of KFC.
All that's left to tweak at the Taco Bell concept locations? The menu, which needs some shareable items -- not unlike those found on Starbucks (SBUX) - Get Report new evenings menu -- that cater to the likely groups sitting down at the communal tables. Brand confirmed the new concepts will not serve alcohol or any new menu items.













