Wendy’s menu takes a big hit at McDonald’s

McDonald’s (MCD) – Get McDonald’s Corporation report fast food breakfast pioneer. The chain makes about 25% of its sales during the morning hours, but it faces growing competition.

Starbucks (SBUX) – Get the Starbucks Corporation report has only been on the national scene since 1992, but the upscale Seattle coffeehouse chain has changed the morning equation. It used the cafe as its main draw, capturing a higher ticket price than McDonald’s and sort of opening up the idea that breakfast could be a competitive part of the day.

It’s a door that McDonald’s has opened by letting its breakfast menu stagnate. The Chicago chain hasn’t added a major new breakfast, at least a hot one, since the McGriddle in 2003. In many ways, the chain has remained tied to its 50-year-old Egg McMuffin sandwich.

It’s been a case of if it ain’t broke don’t fix it – which opened the door to Wendy’s (MAGNIFYING GLASS) – Get Wendy’s Business Report to try to become a player in the morning.

Wendy’s wants to offer a better breakfast

Wendy’s brought breakfast back nationally in 2020. It was a bit of an unfortunate moment due to the pandemic, but the chain had a clear vision: it wanted to follow the model it used with burgers, to be fresher and better than McDonald’s. .

The Dublin, Ohio company made its intentions very clear in a press release launching the breakfast.

“People deserve a delicious, affordable, and higher quality breakfast than what they’re getting right now, so that’s exactly what we’ll be serving when Wendy’s launches breakfast nationwide on March 2,” said Wendy’s US President Kurt Kane.

“Our team will hand-crack fresh eggs on all of our breakfast sandwiches and rely on the quality ingredients that have long set Wendy’s apart from the competition. We’ve crafted unique sandwiches that will leave you craving a another, like the Breakfast Baconator, which includes a freshly cracked egg, a signature sausage patty, and six slices of applewood-smoked bacon.

Kane repeated the words “fresh cracked eggs” multiple times because McDonald’s doesn’t carry them. He didn’t directly challenge his channel’s rival, but his remarks were intentional and very clearly targeted.

Is Wendy becoming a breakfast gamer?

Breakfast quickly became an important part of Wendy’s business. The chain has posted 11 consecutive quarters of global same-store sales growth and Chief Executive Todd Penegor noted this during the company’s fourth quarter earnings call.

“This was partly due to the growth of our breakfast business, which reached 8.5% of sales in the United States at the height of our highly successful Buck Biscuit promotion and global digital acceleration, which reached about 10% of sales by the end of the year,” he said. noted.

This growth has occurred despite changes in customer habits caused by the pandemic. With many more people working from home, demand for breakfast has plummeted, but that hasn’t affected Wendy’s.

The chain clearly believes that breakfast will be one of its big drivers in the future.

“As we look to 2022, we remain focused on our three pillars of long-term growth: building our breakfast, accelerating digital and expanding our global footprint. We believe that today more than ever, [quick-service restaurant] is the place to be. And our blend of convenience, affordability and speed positions us to meet changing customer expectations,” said the CEO.

To maintain that momentum, Wendy’s spent aggressively promoting its breakfast menu. This happened during the pandemic when McDonald’s actually dropped its all-day breakfast menu.

“This growth was primarily driven by successful promotions, which not only resulted in significant trials of our breakfast day, as evidenced by a significant increase in shopper penetration during the quarter, but also an increase in overall awareness of breakfast at record levels,” Penegor said. “This resulted in another quarter of morning meal traffic share growth in the QSR burger category.”

The CEO also clarified that he sees continued opportunities in the morning. And, while he didn’t mention McDonald’s by name, that’s clearly the chain Wendy’s was targeting.

“In 2022, we will add to our playbook to grow the breakfast business as we support growth through menu innovation, such as our new Hot Chicken and Honey Biscuit, as well as offerings compelling trials to further ingrain the habit,” he said.

“We believe our breakfast business in the United States will accelerate in 2022 by approximately 10-20%, bringing average weekly breakfast sales in the United States to approximately $3,000-3,500 per restaurant. by the end of the year.”

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