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Taco Bell parent expands despite slowing sales; Household debt rises; Office attendance declines

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Taco Bell parent expands despite slowing sales

Yum Brands and its global franchisees opened 871 new locations in the second quarter, as the parent company of Taco Bell, KFC and Pizza Hut stands by plans to grow its store count by around 5% annually despite slowing sales facing many dining chains in the current economy.

Executives of the world’s largest restaurant operator, with more than 61,000 locations in over 150 countries, reported same-store sales that fell short of expectations with an overall 2% annual increase. Taco Bell remained its star performer with sales rising 4% from a year earlier, with KFC posting a 2% annual gain while sales declined 1% at the long-struggling Pizza Hut chain.

With Taco Bell now accounting for 37% of Louisville, Kentucky-based Yum's global profits and 82% of its U.S. profits, much expansion will be focused on the taco chain after that division opened 50 locations globally in the second quarter, twice the level of the prior quarter. Plans include opening up to 30 locations by year’s end for its beverage-driven concept called Live Más Café, which was tested near San Diego last year.

“With Live Más Café, our test store has seen a significant increase in transactions while more beverage users are visiting the cafe and choosing to dine in,” Yum CEO David Gibbs said Tuesday during an earnings call with analysts. Most of the initial wave of Live Más stores will be in Southern California and Texas, though officials did not specify locations.

Yum Chief Financial Officer Chris Turner, who will succeed Gibbs as CEO in October, said recent trade tariff increases have so far brought “no observable impact to our development pipelines,” though the company is expecting inflation pressures for key building products sourced from Mexico and Canada. Turner said Yum is somewhat shielded from tariffs since 90% of its development occurs outside the U.S., unlike several of its competitors. 

Household debt rises

U.S. household debt grew by $185 billion, or 1%, in the second quarter compared with the prior quarter, as delinquencies for mortgages and other categories also moved higher, according to researchers at the Federal Reserve Bank of New York.

The regional Fed said the percentage of mortgage loans flowing into serious delinquency, with payments 90 days or more overdue, reached 1.29% in the second quarter, up from 0.95% a year earlier. And second-quarter delinquency was higher for other categories, with auto loans at 2.93%, credit card debt at 6.93% and student loans at 12.88%. New delinquency for student loans was just 0.8% a year earlier but increased largely due to expiration of loan forgiveness programs.

“Despite the recent uptick in mortgage delinquency, overall mortgage performance remains strong by historical standards,” Joelle Scally, economic policy adviser at the regional Fed, said in a statement Tuesday. Still, the report noted overall delinquency for household debt across all categories, at 4.4%, remained elevated by recent standards.

With mortgage loan originations on the rise, the New York Fed said nationwide mortgage debt reached $12.94 trillion as of the second quarter, marking an increase of $131 billion from the prior quarter and a rise of $416 billion from a year earlier. 

Office attendance declines

Office attendance in 10 large U.S. regions averaged 53.6% of pre-pandemic levels for the week ended July 30, down from the prior week’s 54.7%. But the average stayed close to the peak 54.9% reached two weeks earlier, according to the latest tracking by Kastle Systems.

Based on anonymous keycard data from the security technology firm’s office property clients, the average has posted consistently above 51% so far in 2025, as companies increase their in-office work requirements while scaling back on hybrid and remote arrangements.

The latest numbers showed Texas cities remaining in their usual top spots among tracked regions, with Austin at 66.8%, Houston at 60.2% and Dallas at 59.2%. They were followed by Chicago at 58.6%, New York at 54.2% and Washington, D.C., at 51.9%.

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