Monday, May 16, 2022

Wendy’s Hears Consumers Cries for Help with Inflation


At the intersection of what’s for dinner and what will it cost is a battle between restaurants and grocery stores for the hearts and minds of the consumer.  According to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions® menu price hikes and grocery stores CPG prices increases are making consumers think twice before spending anything on dinner.

According to U.S. Bureau of Labor Statistics (BLS) data released on May 11, the Consumer Price Index (CPI) came in 8.3% higher in April compared to the previous April.

The food-at-home CPI is now 10.8% higher than this time in 2021, the biggest year-over-year hike since November 1980. In comparison, prices for food consumed away from home have gone up 7.2% since April of last year.

Wendy’s is battling to garner a larger share of stomach with a price, value, service equilibrium according to Johnson.  When Wendy's first has noticed inflation impacting consumer behavior it began thinking how it could highlight its value offerings in response.

Todd Penegor, The Wendy’s Co. CEO and president, said his company has seen consumer segmentation generally seen across all of the quick-service market, stating “What we've seen in the first quarter and the bucketing under $75,000 cohort of customers,” … “we have seen some of those folks start to slow on the traffic within the category, but that's been made up for by the folks making over $75,000.”

Working hard Wendy’s has to make sure its menu offers appeal to consumers who notice a tighter pocketbook. Penegor continued, “We're working so hard on our calendar to make sure that we've got digital offers in our app, continue to work to make sure that we have the ‘4 for $4’ offering out there,”. The company has also highlighted its $5 Biggie Bags and Buck Biscuit at breakfast.

In a Battle for Share of Stomach

You Can Win

It is at the intersection of value, quality and service that Penegor cautioned that Wendy’s promotions are focused on driving dollar sales as well as driving traffic long term.

While Wendy’s expanded its breakfast menu to Canada restaurants this month; it saw some softness in the U.S. daypart in the first quarter.

“As we looked at the breakfast business in Q1, the category was a little bit softer than we had anticipated,” Penegor said. “Clearly weather in January and February had an impact on the breakfast business. Omicron earlier in the quarter had an impact on the breakfast business. And what we didn't see is the category soften a bit on the breakfast daypart. With that said we gained dollar, and traffic share in the QSR burger category in Q1 at the breakfast daypart.”

Breakfast is an ongoing project and  Wendy’s is confident it can grow breakfast sales by 10% to 20% for the full year and “really be squarely in that $3,000 to $3,500 per week per restaurant by the end of the year. Penegor continued.

Regular readers of this blog with like to know that Wendy’s March Madness promotions drove customers to smartphone app purchases, he said, and in the U.S. the brand reached about 10% digital sales mix, he noted.

Wendy’s same-store sales were up 2.4% systemwide with a 1.1% increase at U.S. restaurants and a 14.1% increase at international units. Growth is still on the table, “We're expecting by the end of this year between 50 and 60 restaurants in the U.K., the combination of company restaurants and to delivery kitchens service,” noted Penegor. The company expects a growth rate of about 20% in international units this year, focused mainly on India, the Philippines and the United Kingdom.

Foodservice Solutions® team is here to help you drive top line sales and bottom-line profits. Are you looking a customer ahead? Does your messaging look more like yesterday that tomorrow?  Visit for more information or contact: Remember success does leave clues and we just may the clue you need to propel your continued success.

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