Whereas Wendy’s holds the number-two spot behind McDonald’s, no less than in america’ fast-food burger battle, the chain has struggled mightily in recent times.
Gross sales have dropped within the chain’s dwelling market, which CFO Suzanne Thuerk tried to elucidate throughout Wendy’s fourth-quarter earnings name.
“In the fourth quarter, global system-wide sales declined 8.3% on a constant currency basis, and U.S. same-restaurant sales declined 11.3%, driven by marketing spend, which was down significantly in addition to a tough comp with our SpongeBob collaboration in the prior year,” she mentioned.
Wendy’s, she famous, merely had fewer prospects.
“The decline in U.S. same-restaurant sales was driven by a decrease in traffic, partially offset by a higher average check,” she added.
Within the fast-food business, an 11.3% same-store gross sales decline is taken into account extreme and indicators greater than routine visitors softness. Established chains usually see same-store gross sales fluctuate within the low single-digit vary, even throughout difficult intervals.
A double-digit decline factors to a significant lack of buyer visits that pricing or promotions can’t simply offset, usually forcing operators to rethink retailer footprints, working hours, and daypart methods to guard franchisee profitability.
The corporate has plans to shut 5%-6% of its 5,831 U.S. restaurant places listed on its web site, or about 292 to 350 underperforming models, Interim CEO Ken Cook dinner shared in the course of the name, a transfer analysts say displays broader challenges in U.S. same-store gross sales and aggressive strain, based on MarketWatch.
For a mature fast-food chain like Wendy’s, sustained double-digit same-store gross sales declines depart few strategic choices. When visitors erosion persists, closing underperforming places turns into much less about retrenchment and extra about preserving franchisee economics and stabilizing the broader system.
Wendy’s additionally plans to reduce its breakfast initiative.
Wendy’s wager large on breakfast
Wendy’s breakfast launched in 2020, proper as the complete nation was being pressured into lockdown as a result of Covid pandemic. The chain had promoting, and promotional companions together with ESPN touting its morning meals on the similar time a lot of its eating rooms had been closed, and folks had been training social distancing.
The Wendy’s Co. launched breakfast systemwide March 2 and ran headlong into the Covid pandemic, which the World Well being Group declared on March 11.
A part of the fast-food breakfast mannequin relies upon upon individuals driving to work and both stopping in for a fast meal, or going by the drive-thru. That was one thing fewer individuals did in the course of the top of the pandemic lockdown interval.
Regardless of that, former Wendy’s Chief Advertising Officer mentioned the early outcomes had been good, based on remarks reported by Nation’s Restaurant Information.
Extra Eating places
- Taco Bell and KFC work on simplifying their eating places
- Chick-fil-A making main change to 425 eating places nationwide
- Bankrupt beer and pizza restaurant chain closes places
- Restaurant chain famed for impolite waiters closes a number of places
“Here we are less than a year into it, and we’re matching competitors who have been in the market for 50 years, literally going from a Breakfast Nobody to a Breakfast Somebody,” Loredo said.
That’s a thinly-veiled dig at McDonald’s, which has been the longstanding fast-food breakfast leader.
Now, the chain has admitted that breakfast has not fully worked and plans to scale it back.
Wendy’s pulling back on breakfast
Wendy’s entered the breakfast space for sound reasons.
“Earlier than the pandemic, breakfast was the one meal that drew a rising variety of prospects to fast-food chains. Lunch and dinner visitors was shrinking as customers selected more healthy choices or made their meals at dwelling. For Wendy’s, getting into breakfast would enable the burger chain to draw new gross sales with out cannibalizing its lunch, snack or dinner visitors,” CNBC reported.
Now, six years later, the company has admitted that some locations have struggled with breakfast.
Cook made it clear that Wendy’s has decided to scale back breakfast, not drop it.
“Breakfast stays an necessary daypart for the system. The massive majority of the system goes to remain in breakfast. We’re not pulling out. We’re working with franchisees proper now to finalize these precise numbers, and we’ll share updates as we go alongside,” he instructed Guggenheim Securities analyst Gregory Francfort in the course of the This fall earnings name.
Wendy’s has plans to reduce its breakfast providing.
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Wendy’s shares its breakfast plan
Cook dinner made it clear that the chain would deal with breakfast on a restaurant-by-restaurant foundation.
“We are also working with franchisees to better align operating hours to demand, particularly for the morning daypart. While many restaurants perform well at breakfast, we recognize it may not work in every restaurant as certain markets have customer dynamics that do not support a thriving breakfast business,” he shared.
The interim CEO views the modifications as leaning into the dayparts that work for every location.
“To strengthen franchisee profitability, we’re providing more flexibility around operating hours for the morning daypart, which allows them to reallocate resources towards the greatest potential for growth across daytime, evening and late-night occasions,” he mentioned.
In some circumstances, that may imply sure places dropping breakfast, whereas others will trim their morning hours.
“This positions the morning daypart to perform where it matters most, delivering greater value for customers while supporting franchisee profitability, and we continue to believe that breakfast is an important daypart for the U.S. system,” Cook dinner added.
U.S. Quick-Meals & Breakfast Market Measurement
- Quick-food & fast service eating places (QSR) income: The U.S. business was valued at roughly $254.11 billion in 2024 with continued reasonable development anticipated, reported Grand View Analysis.
- Breakfast eating places & diners within the U.S. (contains many breakfast-oriented and quick-service breakfast venues): Trade income was $15.6 billion in 2025, based on IBIS World.
- U.S. breakfast takeout market (which encompasses on-the-go fast-food breakfast meals, QSR objects, espresso, and sandwiches): Projected to be about $38.8 billion in 2025, rising towards $73.2 billion by 2035, shared Future Market Insights.
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