Aug 6 (Reuters) - Yum Brands ( YUM ) reported a

bigger-than-expected fall in same-store sales for the second

quarter as sticky inflation discouraged lower-income Americans

from spending on dining out.

Like its peers in the fast-food industry, the Taco Bell

parent has been investing in loyalty programs and refreshing its

menus in an attempt to appeal to budget-conscious consumers.

However, stiff competition for value meals and promotions

has dogged Yum's KFC ( YUM ) business in the United States this year,

with consumers increasingly preferring to cook more affordable

meals at home.

Same-store sales at the company's KFC ( YUM ) division fell 5% in

the United States in the second quarter, compared with a 7%

decline in the prior quarter.

Weakness in sales this quarter at Yum echoes results from

other restaurant majors such as Domino's, McDonald's

and Starbucks ( SBUX ).

Fast-food companies were engaged in a "value war" this

quarter, offering some popular items at a discount in a bid to

offset steep menu-price rises in the U.S. over the last two

years.

The consumer price index for food away from home increased

4.1% between June 2023 and June 2024, up from 4% growth in May,

according to data from the National Restaurant Association.

"As expected, same-store sales were pressured this quarter,

but we are encouraged by strong 2-year same-store sales growth

and positive momentum exiting the quarter," said Yum CEO David

Gibbs in a statement.

Fresh menu items such as the Cantina Chicken and the popular

Taco Tuesday promotional event helped drive growth in comparable

sales at Yum's key Taco Bell division to 5%, ahead of

expectations of 3.6%, according to LSEG data.

This helped Yum narrow its quarterly overall same-store

sales decline to 1%, from 3% in the preceding quarter. However,

this was wider than market expectations for a decline of 0.2%.

(Reporting by Juveria Tabassum; Editing by Devika Syamnath)