TACO BELL USA

Taco Bell has been a story of remarkable growth since Glen Bell opened his first restaurant in 1962.  Two years later, he sold his first franchise unit, and by the time PepsiCo acquired the company in 1978, it had grown to over 900 units.

Today, Taco Bell dominates more than two thirds of the U.S. Mexican quick service market, has no national competitors and serves our spicy, zesty Mexican-style tacos, burritos and nachos to more than 55 million people every week in 6,800 company, franchised and licensed restaurants.  What's more, lunch sales account for almost 50 percent of Taco Bell's business - making it the leading lunch business of each of our three concepts.

And, after two straight years of grappling with negative same store sales (-4 percent in 1995 and -2 percent in 1996), Taco Bell recorded same store sales growth of +2 percent in 1997.  Restaurant margins grew three points, leading to significantly stronger operating profits, and system sales reached $4.8 billion.

This progress was no accident.  We enhanced our food quality by introducing beefier, zestier taco meat, thicker chunks of cheese, more authentic corn taco shells and tortilla chips, and a hot sauce that puts most chili peppers to shame!

Next, we improved operations by placing a Restaurant General Manager in each restaurant for the first time in more than 5 years.  We recognized our operatings suffered when we took management out of restaurants several years back to save cost.  So we've reinvested in the business, and are creating an RGM #1 culture throughout the organization.  But most exciting is Taco Bell's new breakthrough marketing.  We've emerged as one of the best in the industry at identifying hot movies that teens love - like Start Wars and Batman & Robin this year.  And we introduced America's newest celebrity - that lovable little chihuahua who's now starring in our commercials.
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