Wendy's seeks balance across menu offerings

by Monica Watrous
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Wendy's  
Wendy's bacon mozzarella cheeseburger failed to perform to the company's expectations in the recent quarter. 
 

DUBLIN, Ohio — A bacon mozzarella cheeseburger, ghost pepper fries and other limited-time offers at the Wendy’s Co. failed to perform to the company’s expectations in the recent quarter, said Todd Penegor, president and CEO of the Dublin-based fast-food chain.

Todd
Todd Penegor, president and CEO of Wendy's 

“This is our 14th consecutive quarter of positive same-restaurant sales, which demonstrates the long-term strength and relevance of our brand,” Penegor said during an Aug. 10 earnings call with financial analysts. “While our second-quarter sales results came in lower than we had anticipated, we have a strong and well balanced second-half marketing calendar that gives us confidence for the rest of the year.”

Penegor pointed to an industry-wide slowdown in traffic to quick-service restaurants as a driver of weaker results in the quarter.

“…traffic trends were improving throughout 2015, but in Q1 of this year the trend reversed course, and Q2 saw the downward trend continue,” he said. “We believe there are multiple drivers behind the recent slowdown, but the most notable appears to be the continued gap between the cost of eating at home and the cost of dining out, which is now at its widest point since the recession.

“While the recent shift in traffic trends is not favorable, we view this as a bump in the road when looking at the QSR industry’s long-term potential. QSR has consistently grown traffic share over the past 10 years, gaining over 4 share points in that time. This strong track record is driven by hitting on the three key components consumers look for when dining out: taste, convenience, and affordability.”

Wendy's  
In late June, Wendy's introduced the Summer Berry Chicken Salad. 
 

Recent moves at Wendy’s have included the introduction of a bakery-style bun inspired by the chain’s original formulation and the addition of foil sandwich wraps to create hotter, juicier burgers, Penegor said.

“In late June, we introduced our Summer Berry Chicken Salad, which features fresh blackberries picked at the peak of their season, something no other national QSR has been able to accomplish,” he said. “This month we’re highlighting our Baconator, which features fresh, never-frozen North American beef and six strips of applewood smoked bacon that is cooked in our restaurants every day. Additionally, we just introduced our new Grilled Chicken Sandwich, which features a fantastic new multi-grain bun and new fresh-grilled cooking procedures that results in a more tender and juicy chicken fillet.”

Still, he added, balance is key, and offering a compelling price/value proposition to consumers remains an important part of Wendy’s strategy going forward.

“…and we continue to see strength with our 4 for $4 offering, which was expanded in April with the addition of the Crispy Chicken BLT,” Penegor said.

He added: “Our future success will depend on ensuring that we have the right balance of support across our core, price/value, and LTO messages. We are continually fine-tuning our promotional activity in order to drive profitable customer account growth.”

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