Why Taco Bell Won’t Win At Breakfast


Why Taco Bell Won’t Win At Breakfast


Will Taco Bell’s breakfast program be a success? Well, yes, if the standard it uses is Woody Allen’s quip that “80% of success is showing up.”

“We’re not in it to be in breakfast; we’re in to win at breakfast,” Yum Brands Chairman- CEO David Novak told analysts last week. But what does Taco Bell mean by “winning”? Not much, apparently. The chain has set the bar low enough to guarantee success. But there’s a difference between “success” and “winning.” Taco Bell may well succeed, but is it going to be winning anything?

Breakfast represents about 25% of the average McDonald’s sales and 45% for Hardee’s. What is Yum Brands’ target for Taco Bell’s breakfast? About 7%. Novak told analysts this week that Taco Bell stores could see about $100,000 in incremental business as a result of breakfast. There’s nothing wrong with incremental business, to be sure. But given that the average Taco Bell does annual sales of about $1.4 million, $100,000 represents about 7%. That’s a terrific gain for Taco Bell operators in a slow-growth market, but it hardly adds up to “winning.” Not when the average McDonald’s is taking in $650,000 from morning business.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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