CHICAGO (AdAge.com) -- Wendy's is taking a step back from the fast-food breakfast wars. The chain, which has been testing a breakfast concept since 2006, announced this morning that it's going back to the drawing board to improve its products and work on its marketing mix.
Wendy's Taking a Break From Breakfast
"Breakfast is a significant opportunity for us," Wendy's CEO Roland
Smith said at the Cowen and Co. Consumer Conference. But he
admitted the items being tested "weren't high quality and didn't
meet the consumer's expectations." As a result the chain is cutting
the test nearly in half, to run instead in only about 450 stores in
three markets: Kansas City, Phoenix and Pittsburgh. Wendy's merged
with Arby's last year, under the direction of investor Nelson
Peltz. The parent company, once known as Triarc but now simply
called Wendy's/Arby, has pointed to breakfast as a key opportunity
for the brand. However, the chain has had some difficulty making
its products stand out from those at McDonald's, which is the
fast-food industry's breakfast leader. For instance, Wendy's
breakfast items have included a maple-baked "frescuit," which is a
sweet biscuit with sausage, egg and cheese; and a breakfast
burrito. Mr. Smith added that the chain will use the additional
time to retool in-store displays and marketing messages.
Doing it the right way
Wendy's spokesman Bob Bertini said the chain is looking to make a
better case for incremental profitability in the breakfast
business. "We want to do it the right way," Mr. Bertini said of the
chain's breakfast offerings. "We want to offer better-tasting
products with the goal of a higher level of store profitability."
Wendy's plans to add to the number of locations participating in
the breakfast test by the end of 2009. They're now targeting 2011
for a national launch. The chain first introduced breakfast in the
mid-1980s as a more full-service concept. The meal proved
unprofitable for the system as a whole, and it was quickly pulled.
The chain's founder, Dave Thomas, was a staunch opponent of
breakfast as part of Wendy's business, which has presented an
additional hurdle in selling the meal to franchisees. In the
meantime, Wendy's will focus on quality and value messaging in its
advertising. Recent TV work, via agency Kirshenbaum Bond &
Partners, focuses on Wendy's "trio" of value-menu sandwiches, a
"Double Stack" cheeseburger, fried-chicken sandwich and junior
bacon cheeseburger. 'Commitment to quality'
"We have a significant commitment to quality, which means we must
serve better products every single day," Mr. Smith said. "We need
to see improvement in some of our products." Wendy's will attempt
to re-establish its authority in quality by focusing on its
chicken, french fries, and the bacon and buns used for its iconic
burgers. While the fast-food category has grown as a whole in the
past year, Wendy's has continued to lose share. During the third
quarter, company and franchised same-store sales both declined
slightly, by 0.2%. McDonald's, on the other hand, reported November
same-store sales were up 5% in the U.S. alone.