Despite spending heavily behind the introduction of breakfast items, Wendy’s will need to up its morning game to meet ambitious growth goals.
The restaurant chain, which after several false starts over the years plowed into the breakfast business in 2020, expects breakfasts to grow between 20% and 30% this year behind a $25 million advertising push, executives said on an earnings call today. That’s considerable growth, but something less than envisioned only a few months ago when officials were confident they would attain 30% growth this year. The company envisions breakfast as comprising 10% of its total sales by the end of next year; the chain generates about 7.5% today, up from 7% at the beginning of its fiscal year.
According to President and CEO Todd Penegor, the reduced outlook for 2021 reflects a slower recovery from pandemic habits than the chain anticipated. At Wendy’s, he noted, breakfast sales have been strongest between 9:30 a.m. and 10:30 a.m., suggesting consumers may be treating the offering not as a day-starter but as a morning snack. Wendy’s has been counting on early-rising commuters for business in earlier periods but traffic hasn’t recovered as sufficiently as the chain would have liked.
“Folks are eating breakfast as a late morning snack and starting to slowly shift into an earlier morning routine, Penegor said. “And that's why the breakfast daypart has been a little slower to recover relative to rest of the day.”