Yum! Brands, Inc. Barclays 19th Annual Global Consumer Staples Conference

Thank you. Oh, thanks, Jeff.

Yeah, good question, Jeff. Look, obviously, as a brand that has the kind of footprint we do, both in the U.S. and internationally, we got to focus a lot of time on thinking about how the consumer's doing. I'd say as we think about the past year, there's probably two words we'd use. It's resilient and diligent or consumers using discretion. Resilient because frankly, I'm sure a lot of analysts in this room were always surprised and heartened by the strength of the consumer, whether that's wages, unemployment being low, and so on and so forth, and consumer spending holding up. We're continuing to see that. But it's not just whether consumers are spending. In our business to win, it's about how they're spending, when they're spending, and why they're spending.

When you actually think about that, we obviously, similar to many others, are seeing more strength in higher income consumers and slightly lower growth, I'd say, in households making less than $100,000 a year. That's something that I'm sure you see in a lot of companies that you cover. But in addition to that, the consumer is making choices. The divergence in performance in our industry, I think, has never been higher than it is right now, i.e., consumers still need to eat out. Consumers are still going out and using restaurants as an affordable luxury for themselves, but they're making very deliberate choices about what they want and what they don't want. We're seeing that in the divergence of results, particularly in the U.S.

When you think about Taco Bell in Q1 and Q2 of this year, Taco Bell demonstrated mid to high single-digit same-store sales growth, clearly taking share from a lot of other players and benefiting from consumer spending. A lot of it comes down to really not just the consumer being strong, but us thinking about consumer sentiment, consumer love for our brand, what offerings are relevant, how do we enhance our digital offerings to bring in younger consumers. As a result of that, we saw transaction growth and dollar sales growth across all income cohorts in the U.S. with, of course, the strength being in the higher income and slightly lower growth in the lower income consumer.

Oh, that's a great question. Look, we often get the question of food at home, food away from home. As we look at the data, we see the gap in inflation and food away from home versus food at home has narrowed. Over the last couple of years, the restaurant industry in general has started to become more competitive versus food at home. That means we probably are in a slightly more constructive pricing environment, we think, than in the last couple of years. But reality is our business has not changed. In the U.S., and Taco Bell is the vast majority of our business in the U.S. In the U.S., Taco Bell has always had a value-on mentality. I think when you look at the cycle of when people said restaurants took too much pricing, Taco Bell did not participate in that.

We've always had value. We've had very high value perception, and we continue to have that. But it's not just price, it is overall value, which includes, are you relevant? Are you delivering a great experience to consumers? In some of those areas, we continue to put a lot of effort in to make sure we stay ahead of the game.