Wendy’s Garners Breakfast Daypart Success Sorry Burger King and McDonald’s

 

How do chain restaurants make franchisees happy?  Simple drive top line sales and bottom-line profits at the individual store level. The restaurant business is not brain surgery.  It is all about serving customer one meal at a time, serving Hot Food Hot and Cold Food, Fast, Safely, and with Portability according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

When you are not a niche leader the best thing to do is follow success clues of others.  That is exactly what Wendy’s did with its recent launch of French Toast Sticks.  Burger King ‘owned’ the AM fast food French Toast Stick space.  They took their eye off the ball, took consumers for granted, and Wendy’s spotted the weaken marketing messaging at Burger King.  Wendy’s now anticipates average weekly breakfast sales to reach $2,700 by year's end.

Wendy’s CEO Todd Penegor, stated, on the recent Q3 call he expects breakfast, introduced in March 2020 as the pandemic hit, to continue to grow beyond its current $2,700 a week average sales level.

Penegor continued, “We launched French Toast Sticks, our first major menu innovation in the U.S., which drove a meaningful acceleration in the U.S. breakfast sales over the course of the quarter,” …“We have received an overwhelmingly positive reception from our customers, proving just how much growth is ahead of us at the breakfast daypart.”

In case you did not know, Wendy’s breakfast, was rolled out earlier this year to units in Canada, has possible innovation open in the area of breakfast beverages after the success of copycat product introduction success it found with Fresh Toast Sticks.  

During the all Penegor went on; “We are incredibly proud of the success of our French Toast Sticks launch,”…. “This sweet craveable morning treat has quickly become our No. 1 selling breakfast item. The launch helped us maintain our morning meal dollar share in the QSR burger category and drove a meaningful acceleration in U.S. breakfast sales over the course of the quarter with average weekly sales approaching $3000 as we exited Q3.”

Price matter and the price, value, service equilibrium for The French Toast Sticks and a $3 croissant promotion provided confidence that Wendy’s will able to reach the goal of $3,000 average weekly breakfast sales by year’s end, according to the team at Foodservice Solutions®.

Breakfast sales momentum increased in the third quarter beyond the $2,700 a week levels in the second quarter. “It really accelerated nicely in the back half of Q3,” Penegor added.

Marketing matters in the fresh fast-food space.  “We remain committed to our $16 million global investment in breakfast advertising this year just as we remain committed to fighting for our fair share of the QSR breakfast business,” Penegor said. That $16 Million is consumer relevant marketing messaging in the held held food for immediate consumption space according to Johnson.

Adding relevance for consumers was Wendy’s slow shift into technology. Digital sales momentum held at about 9.5% of sales domestically and 15% internationally, Penegor added.

“We expect these results to accelerate even further in the coming quarters as we launched our loyalty program in Canada just days ago,” he said, adding that delivery typically peaks in the fourth quarter. Rewards loyalty members increased about 10% in the quarter as well, he said.

“We are committed to expanding delivery and mobile order access and efficiency, fine-tuning our user experience and further developing our one-to-one marketing program to accelerate our digital business even further across the globe,” Penegor said.

It just may not be as rosy a picture as you might think as Gunther Plosch, Wendy’s chief financial officer, stated inflation eased slightly in the third quarter, falling to about 15% in the period from 19% in the second quarter. For the year, Plosch said, “We are guiding 15% to 16% on commodities and about 8% to 9% on labor.” Traffic was “slightly negative” in the third quarter and price increases were between 9% and 10%.

Don’t over reach. Are you ready for some fresh ideations? Do your food marketing ideations look more like yesterday than tomorrow? Interested in learning how Foodservice Solutions® can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit us on our social media sites by clicking the following links: Facebook,  LinkedIn, or Twitter