DUBLIN, OHIO — Technology is tantamount at The Wendy’s Co., so much so that the company is refocusing its leadership structure around its digital pursuits.
Wendy’s has appointed Kurt Kane, chief concept and marketing officer, to lead a newly created digital experience organization within the company. Gunther Plosch, chief financial officer of Wendy’s, will expand his role by taking on all enterprise technology to oversee the company’s I.T. systems. Robert Wright, chief operations officer and head of international, will transition his international responsibilities to Abigail Pringle and assume responsibility for in-restaurant technology in the United States. Ms. Pringle, chief development officer, will lead the international business in the newly created role of chief global development officer and head of international.
“We're really focused on three big accelerated growth initiatives, and they're all focused on the restaurant economic model,” said Todd A. Penegor, president and chief executive officer of Wendy’s, during an Aug. 8 conference call with financial analysts. “It starts with all things digital, how do we unlock the potential that technology can bring to our customer experiences, how do we continue to drive new restaurant development to provide even more access to our brand across the globe, and how do we continue to drive operational excellence. So, ensuring no matter what restaurant our customer visits, they get an experience that continues to bring them back time and again. And that's why we've made the changes in the organization.”
The new technology-focused leadership team will be tasked with expanding and improving Wendy’s delivery, kiosks and mobile ordering platforms, which Mr. Penegor said he sees as the catalysts for growth for the Wendy’s brand.
“We've got the technology in place in our restaurants,” Mr. Penegor said. “We've got the order flow and the customer flow to work nicely. So that's all accelerating on track. So when we bring this full ecosystem together, when it's all supported, we have all of those elements working well together. And under Kurt's leadership, with support right now from a focused organization working cross-functionally to bring this to life, we feel like we really put ourselves in a good position to differentiate on technology over time.”
Net income at Wendy’s in the second quarter ended July 1 was $29,876,000, equal to 13c per share on the common stock, which compared to a loss of $1,845,000 in the comparable period. Revenues in the quarter totaled $411,002,000, up 3.9% from $320,342,000. North America same-restaurant sales increased 1.9% in the quarter and 1.8% year to date.
“Behind our strong and balanced promotional calendar in the second quarter, we were able to accelerate our same-restaurant sales versus the first quarter on a one- and two-year basis,” Mr. Penegor said. “We have delivered another quarter of strong global systemwide sales growth of 3.1% on the heels of new restaurant development and same-restaurant sales growth.”
Wendy’s grew its delivery footprint by 15% since the end of the first quarter, Mr. Penegor said, expanding the program to about 40% of Wendy’s North American restaurants. The company has partnered with DoorDash in the United States and Skip the Dishes in Canada to build out its delivery offering.
“The consumer has an appetite for convenience, and we have seen this through our delivery economics,” Mr. Penegor said. “Average check sizes have been 1.5 to 2x higher on delivery orders, and we continue to see incrementality and customer repeat. In addition, our strongest customer satisfaction scores are coming from delivery, which is very encouraging. We look forward to leveraging our partnerships to roll out delivery to even more markets.”
Wendy’s also is adding ordering kiosks to more restaurants. About 60% of company-owned restaurants now feature kiosks, which have resulted in higher average checks, Mr. Penegor said.
“We're seeing increased throughput and a good customer experience,” he said. “So that's going to help drive adoption over time.”
Mobile ordering and improvement of the Wendy’s app is another point of focus for the company. The first step, Mr. Penegor said, is to provide more deals and offers within the app.
“That's, No. 1, why folks want to go into the app,” Mr. Penegor said. “Once you have them in that app, then you can start to really leverage all the other things that it will do over time: mobile ordering out of that app, mobile payment out of that app, having integrated delivery coming out of that app.
"So we've got work to do to continue to drive folks to that app, but we also know that — and this is some of the work we're doing with... the refocused organizational efforts — how do we make that more seamless and more frictionless for the consumer when they get into the app to make it a lot easier to use?”