May 12, 2020 | Report Announcements

Wendy’s believes that “people deserve better than what they’ve been getting” and its brand objective is to provide: relevant restaurants; food that is fresh, made with honest ingredients & craveable taste; service that is friendly, accurate & fast; and value based upon a competitive price & Wendy’s quality. “Quality is our Recipe” brand positioning is based upon the use of distinctive square burger patties made with 1/4 pound of fresh, never frozen 100% pure North American beef that is seasoned on the grill and served hot & juicy with freshly prepared toppings. The brand has 4x more consumer association with fresh never frozen vs. its top 2 competitors. Its freshness positioning is reinforced by: use of smaller birds which make its chicken fillets more tender & juicy; daily produce prep; mayo on its burgers; and greenhouse grown tomatoes. Premium positioning benefits from: high-end toppings (applewood smoked bacon, asiago cheese & high-end salad toppings); spicy flavor profiles (S’Awesome); and bakery styled buns that “hold the whole thing”. “One more visit and one more dollar” low/high marketing strategy is designed to use value to drive frequency and premium trade-up to drive check. The brand’s strength in social media is marked by aggressive pushbacks and comebacks (particularly as it relates to McDonald’s), earning its “Clapback Queen” designation. Menu strategy is to: reinforce its hamburger quality leadership; raise consumer expectations with its chicken products; drive unique visits through salads & beverages; innovate with on-trend flavors; and offer a multi-faceted approach to price/value. Its design to value strategy seeks to offer products with competitive entry price points (incorporating flexible regional pricing) that are operationally simple and margin friendly and its popular 4 for $4 platform is permanent & helps drive lunch traffic with new news from changes to entree choices. Breakfast is performing well, driving +16% comps during the 1st week of its launch (1st week of March) and its breakfast mix sustained at 8% throughout April, helped by an admirable 50% awareness level. Notably, Wendy’s digital mix doubled to 5.5% during 1Q20, driving large ticket delivery orders. All-the-same, the system’s long-term comp growth underperformance reflects a historical challenge to translate its premium positioning into a higher check. In conclusion, Wendy’s is executing well against a solid strategy that is likely in time to translate the brand’s premium QSR+ positioning into a higher check and higher sales.

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