Dive Brief:

• Yum Brands’ digital sales made up 30% of its sales mix during Q2 2020, making up $3.5 billion, an increase of over $1 billion from Q2 2019, David Gibbs, Yum Brands CEO, said during a Thursday earnings call with investors.
• The company now has over 34,000 restaurants offering delivery around the world, representing a 13% increase year over year, he said. 
• "What’s happened this quarter [has] accelerated the strategies that we already had in place, which is a big positive, in terms of that business that we do digitally," Gibbs said. "That was part of our plan to grow that business and we’re incredibly proud of the progress that we’ve made there and even things like moving from dine-in assets to delivery assets that’s been accelerated by Q2 2020."

Dive Insight:

The novel coronavirus pandemic accelerated digital sales growth across multiple QSR brands, from Chipotle and Wingstop to Yum, with people preferring to order ahead and use contactless pickup methods within dining rooms that are closed or limited. Yum was already moving toward creating more digital assets, which included growing its delivery channels, since last year with its investment in Grubhub. It also has been bulking up its technology capabilities over the years and brought in new leadership, including its first chief digital and technology officer last year. 

The company has expanded its third-party delivery partnerships, added branded delivery through its website and added more digital assets, including launching Taco Bell’s loyalty program in July. These strategies all allowed each brand to benefit from additional digital orders, which remain a bright spot for the company despite its total global same-store sales declining 15% for the quarter.

Pizza Hut, which has been shifting away from its heavy dining room footprint in the U.S. since last year, launched its contactless initiative during the quarter with additional pickup and payment options, including contactless curbside pickup and delivery, and since March, completed close to 20 million contactless digital orders, Gibbs said. This brand has been experimenting with additional technologies, such as self-service pickup cubbies in Hollywood, California, which were expected to expand to other West Coast cities this year, and acquired digital ordering platform QuikOrder in 2018.  

Taco Bell added over 1 million new users to its e-commerce platforms through its mobile app and website, Gibbs said. Taco Bell also pivoted marketing to promote group bundles, driving awareness of contactless drive-thru and delivery, Craving Box packs and at-home taco bars. Customers can also now order online and pickup through the drive-thru, which also processed 4.8 million more cars during the quarter, Gibbs said. The chain also improved drive-thru times by 18 seconds, he said. 

"These operational improvements and increased focus on digital delivery have made an impact and driving profitable growth for our [Taco Bell] franchisees, and we're extremely proud of our operators for making it happen," Gibbs said.

KFC U.S., which offered pickup and delivery on its website, added new delivery aggregators and bundled bucket meals that travel well, Gibbs said. The brand had its highest average sales per store in the brand’s history during the week in early May, he said. 

Habit Burger, which is heavily weighted toward dine-in with half of sales typically coming from this channel and posted same-store sales declines of 18%, pivoted its focus to off-premise, building customer awareness to new access points and marketing its family meal bundles, Gibbs said. Digital order through its mobile app and kiosks represented 40% of sales during the quarter, and each month the brand has had a steady increase in app downloads, Gibbs said.