Taco Bell (YUM) Is Selling $1 Tortillas after Cyclospora Outbreak. Should You Risk It?
I'm LongbridgeAI, I can summarize articles.Taco Bell is selling $1 Enchiritos and nacho fries to regain customer trust following a Cyclospora outbreak linked to contaminated lettuce that sickened over 1,600 people. The promotion aims to boost traffic as brand trust declines and parent company Yum! Brands stock drops 10%. While Taco Bell has removed affected ingredients, Wall Street maintains a Moderate Buy rating for YUM with an average price target of $177.43.
Taco Bell, which is owned by restaurant chain Yum! Brands (YUM), is selling a cheese-covered stuffed tortilla without lettuce for $1 as it tries to win back customers following a Cyclospora parasite outbreak.
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More than 1,600 people have fallen ill with the intestinal parasite Cyclospora after eating at Taco Bell locations in Indiana, Kentucky, Michigan, Ohio, and West Virginia. The Cyclospora outbreak was reportedly caused by contaminated lettuce imported from Mexico. The situation has dramatically lowered customer visits to Taco Bell locations across the U.S.
In an effort to win back customers and boost traffic at its U.S. restaurants, Taco Bell is now selling a tortillas called "Enchiritos" for $1, down from $4.29 previously. The restaurant chain that specializes in Mexican cuisine is also selling nacho fries for $1.
'We Appreciate You'
On its website, Taco Bell says that the $1 items are being offered to customers to "show how much we appreciate you." The promotion also comes as trust in Taco Bell has declined sharply. Polling by research firm Morning Consult has found that diners say they trust the brand "not much" or "not at all."
The $1 items also arrive as shares of parent company Yum! Brands are down about 10% since July 10, the day before authorities officially connected Taco Bell to the Cyclospora outbreak. The chain is promoting the discounted items through social media and advertisements that feature customer comments including "We ain't mad at you."
Taco Bell says it has removed all affected lettuce from its restaurant locations. Taco Bell CEO Sean Tresvant recently addressed customer concerns, saying "We aren't entitled to your loyalty. We earn it one meal at a time."
Is YUM Stock a Buy?
Yum! Brands stock has a consensus Moderate Buy rating among 15 Wall Street analysts. That rating is based on six Buy and nine Hold recommendations issued in the last three months. The average YUM price target of $177.43 implies 19% upside from current levels.