"The positioning of 'W' clearly was not where it needed to be," Mr.
Hare said. "As a result, we will not promote the 'W' again
nationally. "In retrospect the 'W' cheeseburger in December started
to show signs of diluting our marketing message and cannibalized
some of the success of Dave's Hot 'N Juicy," Mr. Hare said. "Still,
we were hopeful that our February promotion of [Hot 'N Juicy] would
help us regain our momentum, but unusually intense competitive
couponing and discounting negatively impacted our sales growth," he
added. Commodity costs, particularly for fresh beef, also affected
Last year, Wendy's passed Burger King to become the No. 2 burger
chain in the U.S. by sales. But first-quarter sales disappointed
the company and Wall Street . Although it was the fourth
consecutive quarter of positive sales, North American same-store
sales were up less than 1%. Comparatively, McDonald's U.S.
same-store sales were up 8.9% in the period.
The chain is in what it called a "transition year," part of a
turnaround effort that includes modernizing restaurants,
introducing new menu items and positioning the brand as better than
its fast-food competition and on par with fast-casual chains.
Wendy's is also slated to introduce breakfast. It is testing it in
select markets but has not provided details on a national
Last month Wendy's rolled out its new campaign, which carries the
tagline "Now that 's better" and features two spokeswomen: the real
Wendy Thomas, who promotes the brand, and another redhead, who
focuses on product promotion.
"Our marketing messages must improve in impact and relevancy,"
said President-CEO Emil Brolick. "We know we can't out-shout the
competition, so our strategy is not to attempt to play the same
game better, it's to play a completely different game." The new
campaign is an important step toward achieving that and "smartly
challenges consumer food choices and promotes the benefits of
choosing Wendy's ," he added.
As for the rest of 2012, "we will continue to leverage the
quality positioning in our brand with new innovative twists on our
heritage products and return to a few seasonal favorites," said Mr.
Brolick. "We have seen that today's consumer is accessing price
value in multiple ways and more frequently." He said that the
company had recently introduced a "new layer of consumer engagement
with a direct-mail coupon strategy designed to reinforce Wendy's
brand promise message."