Pizza Hut 2008 Annual Report Download - page 10

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dramatically improve U.s. brand positions,
consistency & retUrns.
Our two largest U.S. businesses, Taco Bell and Pizza Hut, both delivered solid
same store sales and prot growth for the full year in 2008. KFC, however, continues
to lag behind the rest of our U.S. brands and it, along with unprecedented commodity
ination, were drivers of under performing prot performance in the U.S. business
overall.
We are condent we’re taking the right steps to deliver stronger brand positioning,
higher returns and consistent growth performance to unlock the value inherent in our
18,000 U.S. restaurants. Our category-leading U.S. based brands have continually
demonstrated outstanding unit economics on a stand-alone basis and generated
$715 million in franchise and license fees in 2008, but we have fallen short in our
goal to grow prots by at least 5% every year.
As we go forward, we have a laser-like focus to better leverage our substantial U.S.
restaurant asset base with sales growth in these ve areas:
1) MORE OPTIONS FOR CONSUMERS ACROSS OUR MENU
2) MORE CONTEMPORARY BEVERAGE OPTIONS & UNIQUE DESSERTS
3) EXPANDED DAY PARTS
4) BROADER PROTEIN OFFERINGS
5) CONTEMPORARY ASSETS
Taco Bell is the best-positioned brand in this macro economic environment with the
#1 value rating of any other brand in the industry. We’re also proud of Taco Bell for
being a leader in the industry through the use of a multi-layer marketing approach
throughout the year to help drive trial and build awareness.
In 2008, we launched the hugely successful Frutista Freeze at Taco Bell and
enhanced the brand’s Why Pay More value menu. Consider this: Taco Bell’s 89-cent
Cheesy Double Beef burrito has 38% more food and 30% more beef than McDonald’s
value-priced Double Cheeseburger. Now that’s a great value!
Last year, too, Taco Bell introduced its Volcano Taco, which opened a major area of
innovation around our core product of tacos; and we are aggressively going after the
dinner day part with unique packaging and bundled meals. The pipeline at Taco Bell
is full and only getting fuller.
We fully recognize that Pizza Hut is in a challenging category,
but we pulled away from the pack in 2008, when we introduced
our Tuscani Pastas (Creamy Chicken Alfredo, Meaty Marinara,
Premium Bacon Mac’ N Cheese) and we have more to come
in 2009. The new pastas, one of Pizza Hut’s most important
and successful product launches in its 50-year history, helped
make Tuscani Pastas a $500 million product line that provides
customers with an affordable break from weekday kitchen duty.
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