Wendy’s Breathing Down McDonald’s Neck

The QSR chain has turned around its fortunes in the past two years enough that its shares have risen more than 80%.

January 08, 2014

DUBLIN, Ohio – Two years ago, Wendy’s looked like a floundering chain. Arby’s had been sloughed off, but the burger QSR had yet to find its feet. Even CEO Emil Brolick said the chain was having “an identity crisis,” reports CBS Money Watch.

But today, all that’s been forgotten as Wendy’s has come roaring back and has attracted new customers and investors. While the number-two burger chain hasn’t come close to besting McDonald’s in sales, it has succeeded in convincing investors that it’s on the right track. Shares of Wendy’s has risen more than 80% over the past 12 months.

The secret to its success has been the revamp of the value menu coupled with the introduction of new premium, limited-time offers, such as its phenomenally popular Pretzel Bacon Cheeseburger. The company has worked on redoing restaurants and packaging, too.

The fast-food chain has sold some stores to franchisees, which resulted in third-quarter, same-store sales jumping 3.2% for company-owned North American locations, and 3.1% for those owned by franchisees. Compared to McDonald’s same-store sales inching up a mere 0.7%, and it’s clear why Wendy’s is pressuring McDonald’s to keep up. “Wendy’s is now executing at the top of the quick-serve game,” said Jim Cramer on CNBC.

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