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Mother’s Day is traditionally the busiest day of the year for KFC restaurants. That day last year, KFC RGM Olimpia Rosas knew almost half the entire town of Berwyn, Ill. would be showing up at her KFC restaurant for a chicken dinner. So Olimpia arrived extra early to fire up the cookers and get a jump on the day. That’s typical Olimpia, pictured here with some of her biggest fans, her customers! She’s maniacal about making sure they aren’t disappointed. For Olimpia, taking care of customers and her team is an uplifting experience.
Carried away by
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customers
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KFC Chicken QSR Sales
“Since building a
foundation for our chicken sandwiches in the fourth quarter of 1999 – when we grew the category more than any other
KFC 53% Popeye’s 9% Church’s 6% Regional’s 4% Independents 28%
chain – we’ve since doubled our 1999 sandwich share and are now aggressively competing for more. “We’ve positioned ourselves with a delicious line of freshly made sandwiches, including Original Recipe, Tender Roast, Triple Crunch, Triple Crunch Zinger and Honey BBQ. And last fall, we extended this sandwich line with the Twister – a unique, zesty, hot-wrap sensation
KFC has strategically invested in consumer learning and product development to ensure we have top-quality, consumer-preferred products across our menu.
that’s proving it can keep customers coming back. 20% of KFC system restaurants had a brighter, slicker look in 2000, and more upgraded units are on the way in 2001.
“We are optimistic about KFC because we have a much stronger and balanced calendar featuring sandwiches, chicken-on-the-bone, strips and wings news throughout the year. We also have an incremental half percent of national advertising, or 11 extra weeks on-air, to promote the variety of our menu. “With a new leadership team in place, we’ve set our sights on two primary goals: operational excellence and brand differentiation. We’ve intensified our focus on superior CHAMPS performance; a targeted new advertising campaign to draw in a whole new
Cheryl Bachelder
President and Chief Concept Officer Mark Cosby
Chief Operating Officer 18
T R I C O N G L O BA L R E S TAU R A N T S
4613 Redesign Pg 16-Pg 23/R3 3/22/01 10:07 PM Page 19
generation of chicken lovers; accelerated unit development; and other initiatives, such as multibranding, designed to fuel sales and increase shareholder value in our brand. “By the end of 2000, 13% of all U.S. KFC restaurants were multibrand units, either partnered with Pizza Hut or Taco Bell, or both. And under an exciting new arrangement with A&W Restaurants, Inc., we opened several KFC/A&W units and plan to build 300 more by 2005. “New leadership, new strategies, a renewed commitment to driving sales – we’re doing whatever it takes to ensure that KFC remains the world’s #1 choice for chicken for many years to come!”
With 53% of the chicken QSR market, KFC has a more balanced marketing approach for 2001. Our franchise partners voted with us to add a half percent contribution to national media spending in 2001.
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You can hear the
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Team member Jeff Shine brightens the day of each customer who comes by his drive-thru window with his large smile, great attitude and outstanding service. This Customer Maniac often gives his customers an experience to remember – whether rhyming their orders or asking them to “Have an exhilarating afternoon, now.” His enthusiasm and creativity keep them coming back for more. Jeff can be found practicing his own special brand of customer mania at a Taco Bell in Huntsville, Ala.
smile in his voice
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Taco Bell is aggressively developing a pipeline of products that will broaden our appeal and improve our ingredient quality. We’ve already scored key customer wins with our new mouthwatering gooey Cheesy Gordita Crunch.
Taco Bell
“We’ve had a challenging year at Taco Bell –
no doubt about it. Same store sales declined 5% for the year – and that is completely unacceptable. But we’re moving quickly to regain strength. We have a new management team in place, and we’re taking a disciplined approach to turn Taco Bell around, once and for all. “Our Taco Bell team is focused on a ‘one-two’ punch of improved operations and improved marketing. On the operations front, our goal is to improve cleanliness and speed of service. We have launched a Clean Sweep program to drive home the importance of executing our clean checklist every day. “To improve our speed of service, we’re simplifying the ordering process at the
The Cheesy Gordita Crunch is a crunchy taco wrapped in gordita flatbread and a melted blend of three cheeses – all spiked with zesty Pepper Jack Sauce. 22
T R I C O N G L O BA L R E S TAU R A N T S
4613 Redesign Pg 16-Pg 23/R2 3/21/01 11:08 PM Page 23
drive-thru. We’ve also provided
Mexican QSR Sales
additional coaching and support to our Restaurant General Managers so they will have the tools, resources and enhanced
Taco Bell 72%
capabilities to improve restau-
Del Taco 3%
rant operations. These initiatives
Taco Bueno 2%
are taking hold, and we should
Taco John’s 3% Taco Time 1% Independents 19%
see positive results in 2001. Taco Bell continues to drive customer mania deep by giving our people the training programs and tools they need to differentiate the brand and keep our customers coming back for more.
“On the marketing front, we have taken steps to immediately strengthen our calendar, enhance our product quality and drive value. We are looking for ways to evolve and dimensionalize our industry-leading value proposition. “Longer term, the big strategic push is for
Taco Bell to broaden our reach, maintaining our stronghold with core heavy users and attracting new customers as the leading variety option. As the market leader with 72% share, we need to expand our user base. Our Taco Bell team is working on a new positioning and advertising approach that will be launched in the latter part of 2001. “So while it’s been a difficult year, we’re making progress. We now have the strategies, the focus and the people in place to deliver the kind of performance results you’d expect from Taco Bell. We’re confident we’ll soon be back on track.”
Emil J. Brolick
President and Chief Concept Officer Bob Nilsen
Chief Operating Officer
Taco Bell’s L-Series incorporates the very latest in engineering technology and design – reducing labor, improving food quality and ensuring customer satisfaction!
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Tricon Facts Worldwide System Units Worldwide Units Year-end 1996-2000
In thousands, year-end 2000
30
29
15 11 7
7
6
5-year growth(a)
2000
1999
1998
1997
1996
KFC Pizza Hut Taco Bell
5,364
5,231
5,105
5,092
5,078
1%
7,927
8,084
8,412
8,640
8,696
(2)%
6,746
6,879
6,852
6,741
6,642
2%
Total U.S.
20,037
20,194
20,369
20,473
20,416
–
KFC Pizza Hut Taco Bell
5,974
5,595
5,318
5,145
4,783
6%
4,157
3,961
3,873
3,894
3,694
4%
249
232
203
200
203
5%
Total International
10,380
9,788
9,394
9,239
8,680
5%
Total
30,417
29,982
29,763
29,712
29,096
2%
Unconsolidated Affiliates Franchised
Licensed
Total
Dairy Queen
Wendy’s
Domino’s Pizza
Subway
Burger King
Tricon
McDonald’s
(a) Compound annual growth rate
Breakdown of Worldwide System Units
Year-end 2000
Company
United States
KFC Pizza Hut Taco Bell
1,339
–
3,978
47
5,364
1,801
–
4,888
1,238
7,927
1,162
–
3,996
1,588
6,746
Total U.S.
4,302
–
12,862
2,873
20,037
KFC Pizza Hut Taco Bell
1,109
1,022
3,790
53
5,974
668
819
2,466
204
4,157
44
3
169
33
249
Total International
1,821
1,844
6,425
290
10,380
Total
6,123
1,844
19,287
3,163
30,417
International
24
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