Wendy's diving into delivery

by Monica Watrous
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Courtesy: The Wendy's Co.
 
 

DUBLIN, OHIO — By year end, The Wendy’s Co. expects to offer delivery in 2,500 restaurants after early results in test markets produced “some significantly higher checks,” said Todd A. Penegor, president and chief executive officer.

The hamburger chain has partnered with food delivery service DoorDash as it treads into the tricky yet increasingly crowded battlefield of fast-food delivery.

Todd Penegor, Wendy's
Todd A. Penegor, president and c.e.o.

“…the beauty that we like with a partner like DoorDash; it really hasn’t impacted us at all operationally from the restaurant, and the structure that we have on the commissions with them is very reasonable, especially as these are highly incremental purchases that the consumers have,” Mr. Penegor said during a Nov. 8 earnings call. “We feel good about making sure we got a price point that works ultimately for the consumer. So it works for the consumer economic model. It works for the restaurant-level economic model and creates a great experience because we’re delivering the food quickly with high integrity as they would expect along the way.”

Courtesy: The Wendy's Co.
 

Delivery is only one page of the playbook for Wendy’s, which also continues to lean on a balance of price promotions and premium products to drive same-restaurant sales growth. This approach helped the company achieve a 2% increase in North America same-restaurant sales in the latest quarter, in spite of the impact of recent hurricanes.

“We have now delivered 19 consecutive quarters of positive same-restaurant sales in North America, a streak that is unmatched in the current Q.S.R. hamburger category,” Mr. Penegor noted.

Net income in the third quarter ended Oct. 1 was $14,257,000, equal to 6c per share on the common stock, which compared with $48,890,000, or 19c per share, in the year-ago period. Revenues totaled $308,000,000, down from $364,012,000. The decline was due to the ownership of 249 fewer company-operated restaurants compared to the prior-year period.

“We started off the quarter by being the 50c Frosty promotion for a second year,” Mr. Penegor said. “This promotion continues to show the advantages of a strong price-pointed offering by driving traffic and contributing to check growth. In conjunction with the 50c Frosty, we introduced the Bacon Queso Trio, which was a great opportunity to show off our ability to innovate with on-trend flavors and also highlight our fresh, never-frozen beef and our improved chicken offerings.

Courtesy: The Wendy's Co.
 

“Next up was the Giant Junior Bacon Cheeseburger $5 meal deal. By adding this bundled offering to our menu while still keeping the 4 for $4 active, we gave our customers the flexibility to trade up for $1 and receive double the beef, double the bacon and double the cheese.”

Recently, Wendy’s introduced new chicken tenders and fresh-baked cookies, demonstrating “our dedication to continually innovating around our food,” Mr. Penegor said.

“A balanced marketing approach contributing to consistent same-restaurant sales growth, new restaurant development and the reimaging of existing restaurants are all key factors that will enable us to achieve our 2020 target of $12 billion in systemwide sales,” he said. 
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