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Can the Quesalupa Save Taco Bell?

By Rick Munarriz - Feb 7, 2016 at 9:00AM

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Yum! Brands will introduce a new item -- a cheese-filled chalupa -- on Monday. The ad airs during tonight Super Bowl.

Image source: Taco Bell.

Yum! Brands (YUM 1.59%) will officially introduce the Quesalupa during tonight's Super Bowl and will begin offering it at all of its domestic restaurants on Monday. However, it did give some of its biggest fans the ability to grab one ahead of the actual rollout. 

In a bold move to promote its online ordering platform at the expense of taking some of the surprise out of its Super Bowl ad, Taco Bell allowed customers to pre-order a mystery item sight unseen. Folks agreeing to pay $2.99 for the new menu addition were able to pick it up on Saturday afternoon, and that's when it was revealed that the new item is a Quesalupa. 

As the name implies, Taco Bell's new entree is a chalupa with a quesadilla tweak. It's essentially a chalupa, only the fried flatbread that serves as its shell is stuffed with cheese.

The initial reaction has been generally positive. Most of the social-media posts detailing the new addition to the Taco Bell menu have been positive. 

Sure, the Quesalupa will get blasted for its unhealthy ways. That's inevitable, and it's not something that has stopped Taco Bell's previous rollouts from moving the needle. 

Taco Bell itself is holding up well. Yum! Brands posted quarterly results on Wednesday afternoon, and Taco Bell was the standout. The chain's year-over-year comps growth of 4% was better than the 3% gain at KFC and 1% uptick at Pizza Hut.

Yum! Brands certainly doesn't need the Quesalupa to succeed for it to be a hit. However, having a hot product at a time when the former market darling of burrito rollers is reeling can only help.

Is it a coincidence that Taco Bell came through with a decent 4% gain in comps during the same period that Chipotle Mexican Grill (CMG 0.20%) saw its store-level performance plunge 14.6%? You probably will never see a comps gap of 1,860 basis points between Taco Bell and Chipotle, and certainly not in Taco Bell's favor.

Chipotle obviously isn't going to follow Taco Bell into Quesalupas. It doesn't play that game. However, with Yum! Brands taking advantage of this new product to push its mobile ordering app and expand its menu at a time when a rival is going the wrong way, we know which company is winning the game.  

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Stocks Mentioned

Yum! Brands, Inc. Stock Quote
Yum! Brands, Inc.
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Chipotle Mexican Grill, Inc. Stock Quote
Chipotle Mexican Grill, Inc.
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