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News >  Business

Taco Bell adds boozy Vegas flagship in bid to energize brand

By Craig Giammona Bloomberg

Yum Brands Inc., now more reliant on its Taco Bell chain to fuel growth, is opening a booze-serving flagship restaurant on the Las Vegas Strip to help invigorate the Mexican-food brand.

The new location will offer a retail shop, bar menu and all-night operating hours — the first time a Taco Bell has tried that combination. Yum also is updating the Taco Bell logo for the first time in decades, part of a plan to add 2,000 Taco Bells globally by 2022 and become a $15 billion business.

Yum, which also owns KFC and Pizza Hut, is focusing more on Taco Bell after the spinoff last month of its Chinese operations, which had generated about half the company’s revenue. With just a fraction of its restaurants abroad, Taco Bell remains primarily a U.S. business and will now account for about a third of Yum’s operating profit.

The Las Vegas location, the chain’s 7,000th domestic restaurant, opens during a broader slowdown in the U.S. fast-food industry. Companies are stepping up discounts and promotions in a bid to stand out. Food deflation also has squeezed restaurants by pulling down grocery prices and making meals at home more attractive.

The new Taco Bell is meant to showcase the brand, which attracts young men and night owls. The debut also presages an expansion into more urban locations, said Marisa Thalberg, Taco Bell’s chief marketing officer.

“It’s the brand on steroids,” she said.

The Las Vegas restaurant, which joins McDonald’s and Subway on the Strip, will feature an open kitchen, tapas-style appetizers and a “freeze wall” offering drinks that can be customized with gin, vodka, rum, tequila and whiskey. It builds on Taco Bell’s so-called “cantina” concept, which was unveiled in Chicago last year. The new branches don’t have drive-thrus, unlike typical Taco Bells, and fit better into urban areas — where the brand has historically had a limited presence.

That Chicago restaurant, located in the Wicker Park neighborhood, was the first Taco Bell in the U.S. to sell alcohol. Two other cantinas have since opened in San Francisco and Austin, Texas, with four more in development. Wine, beer and frozen drinks are a draw for customers, and the new restaurants are designed to look good in posts on social media — an increasingly important form of currency for restaurant chains.

“We live in an Instagram world,” Thalberg said. “You know you have a brand people love when they want a piece of it, beyond just eating the food.”

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