What is in this article?:
- Examining the latest menu tests at McDonald's, Burger King
- Platforms in place at Wendy's, Taco Bell
McDonald's is testing new fries and Burger King is offering burgers at breakfast. An analyst says the moves are unlikely to steal momentum from Wendy’s and Taco Bell.
Platforms in place at Wendy's, Taco Bell
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Elsewhere in the quick-service segment, Gordon noted, Wendy’s and Taco Bell seem to be done with tests currently and are enjoying momentum from reworked or newly launched platforms.
Wendy’s recently reported first-quarter same-store sales increases of 1.3 percent for company-owned units and 0.6 percent for franchised locations. The Dublin, Ohio-based chain’s executives credited the chain’s menu balance for attracting and maintaining customer traffic.
Value-focused transactions “are no longer a leaky bucket” with the Right Price Right Size menu in place, Wendy’s chief executive Emil Brolick said. He also noted recent innovation around the core menu, with two new salads, as well as the limited-time offer pipeline with a current promotion of Tuscan Chicken on Ciabatta.
Taco Bell’s comparable sales in the United States fell 1 percent in its first quarter, but officials for parent company Yum! Brands Inc. were very bullish about the chain’s new breakfast program, which rolled out nationwide March 27.
Yum chief financial officer Patrick Grismer said Irvine, Calif.-based Taco Bell expects the breakfast menu to achieve the high-single-digit mix of sales it garnered during tests the past few years, which was “highly incremental” to traffic.
“If we achieve and maintain that mix, that’s what we need to deliver our same-store sales target for the year,” he said. “It will be accretive to margins and put us in the position to accelerate the pace of new-unit development.”
While the rollout was timed ideally to hit breakfast’s seasonality, the morning menu would still need time to build for Taco Bell on a national scale, Gordon said.
“It will take a year of really executing and marketing breakfast,” he said. “The securities analysts shouldn’t be banging on the table to get the optimal results from it right away.”
In a related matter, he added, Wendy’s focus on its three main parts of the menu is benefiting from its decision to shelve its test of breakfast yet again last year, “and that is Emil — he is a very bright, thoughtful man,” said Gordon, who worked with Brolick at Ponderosa decades ago.
“I wasn’t surprised when he came on board and decided that Wendy’s had bigger fish to fry [than breakfast],” he said. “It’s his way of thinking, and it’s correct. There’s still an essential synergy with breakfast for your lunch and late-night dayparts, where you have to have a strong breakfast platform, but I think Wendy’s will get to it eventually.”
Contact Mark Brandau at firstname.lastname@example.org.
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