Wendy’s is in the process of changing a whole lot about the company — from introducing new menu items to remodeling stores and crafting an updated logo for the brand.
The changes are all part of a process to help the quick-service restaurant chain “leap frog” over its competition, said Craig S. Bahner, chief marketing officer at Wendy’s Restaurant Group.
Wendy’s, which has reported same-store sales increases for the past five quarters, is on the up-and-up, he said, but there’s always room for improvement. New Wendy’s locations won’t just have a new logo — they’ll also feature Wi-Fi access, fireplaces and digital menu boards.
The brand is also introducing a Mobile Nutrition smartphone app that is designed to allow consumers to customize meals and more easily calculate their calorie intake.
“Consumers have raised the bar, and we have to meet that bar,” he said. “[The restaurant remodel] is part of a broader campaign that includes the new uniforms and the logo we announced today. It has the advertising component and also marketing, including our digital program and menu innovations.”
Bahner sat with Nation’s Restaurant News on Thursday to discuss the recent changes at Wendy’s, as well as what’s next for the Columbus, Ohio-based company.
Tell us a bit about your new logo. It’s markedly different.
The logo is part of the overall brand transformation, and it is an important part of it because it really is a tangible, visual signal of change. All great brands evolve, and we’re evolving. A lot of great brands have evolved faster than we’re evolving, but that’s ok. We’re a quick-moving group.
If you look at what consumers told us about this logo, they said, 'You’ve got some iconic elements here that we don’t want you to lose.' We’ve got the cameo, or the picture of Wendy. The color red is signature for us. The logo [shape] is distinctive, what we call the Wendy’s wave.
When we set out to design this, we used a lot of consumer input, a lot of franchisee input. We kept narrowing it down. We came up with this [new design], and it incorporates the three elements consumers wanted. We’re really happy with it. It is a signal of the brand transition we have underway.
Why did you lose the 'Old Fashioned Hamburgers' part of the logo?
If you think about our brand, gosh, we certainly sell a lot of hamburgers and cheeseburgers, but we also are leaders in innovation in, we’re leaders in salads. We felt we needed to reflect our product line of today and where we need to be in the future.
The 'Quality Is Our Recipe' tagline has been moved.
We feel that it’s an important value statement for our brand. We wanted to let that out of its cage, so to speak, and use it on our signage and our soft assets, like packaging. Now consumers are going to be able to see, it read it and engage in it, as opposed to having it high up and set apart.
You currently have a two-pronged TV advertising campaign, with one commercial series featuring Wendy Thomas and another featuring Red, an energetic female redhead. How do you measure the success of each aspect of the campaign?
We’re very happy with the progress that we’re making on the dual legs of one campaign. Each of those legs does a very specific job.
The Wendy Thomas leg is talking about our brand’s values and why we do the things we do and what’s important to us. That’s been very effective in terms of rekindling those values that the brand clearly stands for. On the Red side of the equation, we’re very happy with the work we’re doing there in terms of the brand offering, promoting specific products we’re focusing on at any given point in time.
We really see these campaigns as working very complementary to each other. I can tell you — not that we’re not going to continue to evolve the campaign as we go, because we will — that we’re happy with the progress we’re making today.
Wendy's is using new 'Image Activation' restaurants. What has been the sales impact of these locations?
It’s really difficult to isolate the impact of one element, like a digital menu board. We have to look and say what we’re doing is we’re transforming this brand and it has multiple elements. We have remodeled restaurants with digital menu boards, different types of cues to help with customer service, self-serve drinks, Coca-Cola Freestyle, very comfortable seating, Wi-Fi and fireplaces.
A lot of that is because the competitors in the marketplace have raised the bar. So far we’re getting traction. We’ve had five consecutive quarters of same-stores sales [increases], and Zagat just rated us as the number-one chain brand overall.
How much do these redesigns cost?
About $750,000. It’s a significant redesign. But the [return on investment] is there. We’re seeing lifts of 25 to 30 percent on a sustained basis. The numbers are really exciting. We know that that’s a big price to pay.
Will Wendy’s corporate be providing any incentives to franchisees to remodel restaurants?
We are so serious and believe in this program that for 2013, we’ve got a $10 million incentive pool. We will provide a $100,000 incentive to the first 100 franchise restaurants that are remodeled to this design, and we’ve had a very, very strong interest in that from our franchisees.
Why are these all of these changes happening now?
Look around. Chipotle, Panera, Five Guys — this is the new standard. They’re doing super jobs, but they have the advantage of coming in and being able to build new spaces and new concepts from scratch. We can’t stay stagnant in that environment. We have to continue to evolve our brand and grow our brand.
Our consumers have a different picture of what they expect. We have to leap frog now. It’s not just about catching up, because everyone else is moving forward. You grow brands to be viable not for a quarter, but for years.
Wendy’s has experimented withbut has yet to break through. What’s next?
Breakfast is a highly important daypart. One out of every four visits to a QSR is around the breakfast occasion. The problem is we’re kind of last to the table, and when you’re last, you can’t come in with a “me too” offering. You have to play a different game.
With the current program that we have in place, we have not yet felt like we’re at a place where we’ve got the three greens — consumer proposition, operational capabilities, and a financial proposition that works — and as such we’re continuing to look at what other type of proposition we need to have in order to be a viable competitor and have a profitable presence in that space. That’s an ongoing process. I won’t really put a timeline behind it, but we don’t think we’re quite there yet.