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Taco Bell Eyes Smaller Restaurants in Response to Pandemic

Yum's Taco Bell, responding to the pandemic, next year will focus on restaurants that are a bit more than half the size of its current ones.
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Yum Brands’  (YUM) - Get Free Report Taco Bell fast-food chain on Thursday unveiled a new restaurant design, Taco Bell Go Mobile, as it adjusts to the coronavirus-world reality of fewer customers eating in restaurants.

Starting next year, the restaurants will encompass 1,325 square feet (123 square meters) compared with an average 2,500 square feet for Taco Bell restaurants now. 

Two drive-through lanes will highlight the new restaurants, enabling faster service for eaters who order through the chain’s app. The new facilities will provide contactless curbside-pickup service.

“We have a lot of franchisees interested in expanding drive-through capacity,” said Taco Bell Global Chief Operating Officer Mike Grams, according to CNBC.

“Go Mobile” includes indoor shelves for picking up digital orders. Dining-room size will be dictated by market size.

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Yum, which also owns KFC and Pizza Hut, reported stronger-than-expected second-quarter profit.

The Louisville, Ky. company said net income dropped to $206 million, or 67 cents a share, from $289 million, or 92 cents, in the year-earlier quarter.

Analysts surveyed by FactSet predicted earnings per share of 55 cents for the latest quarter.

Revenue fell 9% to $1.2 billion from $1.31 billion last year. The latest figure beat analysts’ projection of $1.18 billion.

Same-store sales dropped 15% in the second quarter, compared with the FactSet analyst consensus call for a 14.1% slide.

Digital purchases helped boost the quarter's total, and sales got better later in the quarter as restaurants reopened.

Yum recently traded at $93.59, off 0.4.%. The shares had lost 7% year to date through Wednesday.