Wendy’s breakfast should’ve flopped because of this. It didn’t.
“We could not be more pleased with our breakfast daypart since its launch in early March,” CEO Todd Penegor said in this week’s earnings call. Interest in breakfast hasn’t faded, he said, noting sales at stores open at least a year finally turned positive in July because of the “continued strength” of the new breakfast offerings.
Wendy’s immediate success can be partially attributed to the lockdowns, rivals’ struggles (notably McDonald’s) and even boredom.
“With not much else to do, some consumers welcome the opportunity to try a fun new menu item during this crisis,” Jill Failla, senior food service analyst at Mintel. told CNN Business. “This trial gives them something to talk about with family, friends and on social media.”
It also didn’t hurt that Wendy’s struck when McDonald’s was ailing. The chain has boasted of its success during the mornings, but has struggled in recent years with new competition from a variety of places.
Breakfast was born
Roughly 300 of Wendy’s 6,000 US restaurants served breakfast, including a bacon sandwich and a honey butter chicken biscuit. A cohesive menu supported by a national marketing campaign “provides incredible growth opportunities,” Penegor said at the time.
For starters, the company worked closely with restaurants and created a menu that doesn’t require new equipment. Franchises had to spend upwards of $10,000 on equipment the last time it offered breakfast several years ago. Only three employees are needed to work the shift, which is one fewer employee than last time.
Wendy’s hired about 20,000 employees and said it wanted to initially spend $20 million on marketing. However, some of the marketing spend was put on pause because of the pandemic. This week, Penegor said Wendy’s is going to spend $15 million to promote breakfast later this year “as more and more people fall back into their daily routines.”
Five months into the endeavor, a Wendy’s spokesperson told CNN Business that its top-selling breakfast items are the Breakfast Baconator, honey butter chicken biscuit, maple bacon chicken croissant and the Frosty-ccino.
Breakfast is filled with a number of restaurants battling for taste bud supremacy, including Panera, Starbucks, Dunkin’, Taco Bell and, the behemoth itself, McDonald’s.
Starbucks CEO Kevin Johnson said the “disruption to the weekday morning routines, notably commuting to work and school, is a headwind.” Dunkin’ noticed a drop off in visitors from 6 am to 9 am, but some are visiting from 11 am to 2 pm for snacks or non-coffee drinks.
Wendy’s sustaining its success in the morning depends on if “consumers enjoy the breakfast trial enough to repeat their purchases,” Failla said.
“The feedback so far has been mostly positive, but it will be an uphill battle for Wendy’s during this public health and economic crisis,” she concluded.