Wendy's backs further away from breakfast

by Monica Watrous
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DUBLIN, OHIO – The most important meal of the day has not been a particularly profitable one for The Wendy’s Co. In a presentation at the ICR XChange Conference in Miami on Jan. 16, the company said it will discontinue breakfast in some markets.

“We will still have 375 to 400 restaurants in breakfast …  but breakfast is not really going to be a top priority for us in this next three-year period of time,” said Emil Brolick, president and chief executive officer for Wendy’s. “Longer term, we might well come back to that, but that’s when we find a much more profitable way to approach that day part opportunity.”

Wendy’s has been working to retool its breakfast strategy in an effort to be more competitive in what Mr. Brolick identified in an Aug. 9 conference call with financial analysts to discuss the company’s second quarter results as “the strongest performing Q.S.R. day part for the past five years.”

“We want our share of this business, but we want it to be a profitable share for our system,” he said in August. “We will be making refinements to our testing of AM Access with the goal of providing consumers a unique morning meal experience that reflects our commitment to playing a different game versus just trying to play the same game better.”

Part of the company’s strategy included a coffee campaign for Redhead Roasters.

Looking ahead, Wendy’s will refocus its efforts on brand transformation and marketing, as well as recent introductions such as the Right Price Right Size value program, which is off to a strong start since its January launch, Mr. Brolick said.

“As we look to 2013, we are optimistic about our product pipeline and marketing plans,” he said on Jan. 16. “We are also very encouraged by the continued success of our image activation initiative, which is transforming our brand in the eyes of consumers by contemporizing the Wendy’s restaurant experience.”

The image overhaul includes updated menu boards that were rolled out at the end of 2012; a new logo, which will appear in advertising at the end of February and on packaging throughout the year; and new uniforms, to be introduced in the third quarter of this year.

Consistency in messaging is another area of focus for Wendy’s.

“One of the things you're going to see in 2013 is a better balance of what we call our high- and low-end messages,” Mr. Brolick said. “If you would look at the past 15 months, what you would see is that we have built share of large hamburger; built share of large chicken sandwiches; and held a leadership position in share of salads. At the other end, though, we have lost share in that price/value area and have lost traffic in that area. We believe that that is simply the result of we have not had a consistent message in the price/value area while many of our large competitors have had that kind of a message. We believe that the launch of the Right Price Right Size Menu is a first and very important step in beginning to address that.”

Wendy’s will build a “strong marketing presence” around its late-night menu and what the company considers to be its more innovative products, such as the bacon Portobello melt and berry almond chicken salad, Mr. Brolick said.
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