A leading fast food restaurant chain is experimenting with a new unlimited taco pass to help grow its loyal customer base and add to its sales momentum.
What Happened: Taco Bell, a unit of Yum! Brands, Inc. YUM, is experimenting with a Taco Lover’s Pass at select locations.
Taco Pass owners can order one crunchy taco, soft taco, spicy potato soft taco or Doritos Locos taco for free each day for 30 days straight.
The Taco Lover’s Pass costs $5 to $10 a month, depending on the test location. Seventeen locations in Arizona are testing the pass from Sept. 9 through Nov. 24.
Several of the tacos included in the plan are offered around $1 to $2 each, which could make the pass pay by itself with five to seven visits in the month.
Why It’s Important: Taco Bell has been a strong performer for Yum! Brands and continues to post strong same-store sales growth.
Taco Bell is utilizing new product launches such as a chicken sandwich taco to get additional customers to its stores. The company is also experimenting with its unit expansion, including building a two-story drive-thru lane to better serve customers and third-party delivery service.
The subscription service from Taco Bell follows other restaurants that have had mixed results with similar offerings.
Restaurant Brands International Inc QSR company Burger King launched a $5 a month unlimited coffee plan in 2019 to help boost its breakfast business. The plan was discontinued.
Panera Brand has an unlimited coffee and tea plan available for $8.99 a month and has more than 500,000 subscribers to the plan.
Olive Garden, owned by Darden Restaurants, Inc. DRI, offers an Olive Garden’s Pasta Pass that gives a customer free unlimited pasta during the promotion run. The company only sells a select number of passes each year.
Many customers order more than one taco at a time, making this a potential customer acquisition tactic by Taco Bell. If a person gets the Taco Pass they are likely to add additional items to their order during each visit.
The Taco Pass will also push users to download the Taco Bell app and sign up for the company's loyalty program.
The last earnings call from Yum! Brands said Taco Bell loyalty members spend 35% more on visits than other customers.
Right now, only those in Arizona can get a taco a day with the pass. Look for a successful test to lead to a national rollout.
Price Action: Yum! Brands shares are down 0.65% to $129.05 at market close Monday.
Photo: Courtesy Taco Bell
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