Taco Bell's CEO says the chain's 'magic formula' is fueling growth as rivals fall flat

• Taco Bell delivered 7% same-store sales growth in Q4, outpacing the rest of the fast food category.
• CEO Sean Tresvant sat down with Business Insider to explain the secret to the chain's success.
• Tresvant said Taco Bell's advantage lies in its value perception, innovation, and customer loyalty.

Taco Bell CEO Sean Tresvant has a simple explanation for why his brand keeps winning while much of the fast-food industry is struggling: it's doing more than one thing well at once.

"When you look at being a buzzy brand, you look at value, you look at digital, you look at category entry points and innovation, and all those things are working in concert with each other," Tresvant told Business Insider. "Other brands can do one or two. When we do it, we get all four right, and we're very good in each part of that magic formula."

Yum! Brands, Taco Bell's parent company, announced during its earnings report on Wednesday that the Mexican-inspired chain delivered 7% same-store sales growth in the fourth quarter, far outpacing the rest of the segment as consumers continue to pull back on dining out.

While much of the fast-food industry is grappling with slowing traffic as customers watch their wallets, Taco Bell's growth was driven by bigger-ticket transactions, especially among younger diners, even as competitors relied heavily on discounting.

Foot-traffic data backs that up. A Placer.ai analysis of Yum Brands' fourth-quarter performance found that Taco Bell locations held up better than many quick-service competitors during key value-driven periods, even as broader fast-food visits softened amid inflation fatigue.

Tresvant says Taco Bell's advantage comes from combining the things competitors often struggle to balance: offering consistently good value rather than short-term deals, rapid-fire menu innovation, and a growing loyalty program that's actually driving incremental visits. That formula, he told Business Insider, has allowed Taco Bell to keep growing traffic and relevance "in any environment," even as other fast-food brands fight simply to stay flat.

Taco Bell's numbers reflect its loyalty push. Tresvant said active loyalty members climbed 31% in the fourth quarter, while digital channels grew 29%, as app-exclusive drops and rewards nudged customers to visit more often. Tresvant said the goal isn't just engagement, but turning loyalty into repeat traffic — which keeps the brand resilient.

Although value-focused options now make up 17% of Taco Bell's menu, like its $5, $7, and $9 bundle offerings, what especially appeals to Taco Bell consumers is its pace of menu innovation — even when they're full price. From the return of its Quesarito and recent launch of its sauce collaboration with Frank's RedHot, to limited-time beverage offerings at its Live Más Café locations, every new rollout, Tresvant said, is "determined on consumer needs and wants."

Fast food's old playbook is breaking down

Across the restaurant industry, traditional quick-service strategies aren't working as they once did because of the uneven pressure of the K-shaped economy, where lower-income consumers have pulled back on dining out while higher-income spending remains stable.

Many chains have leaned hard into deep discounting and short-term deals to lure customers back, but analysts and industry executives warn that constant promotions can erode pricing power and fail to drive meaningful traffic growth.

At the same time, competitors like Chipotle are recalibrating for smaller, wealthier consumer segments, underscoring how uneven the recovery has been across the sector.

That's not the strategy for Taco Bell. Instead of narrowing its focus, the chain has leaned on loyalty perks and app-exclusive offers to keep a broad range of customers coming back — particularly younger diners who are more likely to engage digitally even as they cut costs elsewhere.

"We continue to innovate on the menu, but not only on the menu," Tresvant added. "We're going to make sure we're innovating from a guest hospitality standpoint, we're going to innovate in operations and innovate around the brand, not just in food."

That means continued exploration of voice AI ordering systems, which are being tested at 600 Taco Bell locations, as well as other efficiency-optimizing technologies to streamline back-of-house operations and improve the guest experience.

It also means giving consumers new ways to stay connected to the Taco Bell brand, like its Y2K-era cross-brand collaboration with Hollister, which sold out late last year.

For Tresvant, that momentum has created rare room to experiment at a time when much of the fast-food industry is still focused on defense.

"The things we're doing are working, and that just gives us a little bit of permission to take big swings in 2026," Tresvant said.