What is in this article?:
- Wendy's aims to recapture value-conscious consumers
- Striking the right balance
Company to emphasize 99-cent price point in messaging for Right Price Right Size menu
Striking the right balance
Continued from page 1
Wendy’s decision to increase national advertising around the Right Price Right Size menu across the rest of the year — accounting for more air time than a simultaneous campaign for its higher-end limited-time offers — acknowledges “an increasing bifurcation of consumers,” Brolick said.
He pointed out that price-conscious consumers still account for much of the traffic in quick service, even though a fair number of people have the capacity to pay more for a premium sandwich. The Flatbread Grilled Chicken sandwiches demonstrated that notion, Brolick said, pointing out that the limited-time offer drove sales of large chicken sandwiches to a nine-year high in the first quarter.
Yet despite a solid launch of the Flatbread line, loss of market share for the important price-conscious customer offset some of the sales growth Wendy’s built with the limited-time offer.
“We have lost share in the price-value arena, but basically have not had pressure against price-value messages since the launch of Right Price Right Size in January,” he said. “That’s why it’s apparent to us that this core group of 99-cent price shoppers, they’re heavy users often of quick-serve restaurants, and you need to continually remind them that you have products available for them every day, just because their economic situation necessitates that price point.”
Brolick stressed that the initial flight of advertising for Right Price Right Size in January produced a positive mix shift and a beneficial effect to restaurant-level margins for the first quarter. “That’s a significant point,” he said, “because remember, we moved from a situation when we had our My 99-cent menu, where we did not have a lot of continuity across the United States in terms of franchisee support.”
This time, he said, Wendy’s franchise operators are much more behind the system of six items being priced at 99 cents, with another eight items on the menu between $1.19 and $1.99. “What that’s done for us is it’s given our franchise partners some pricing flexibility on those eight items and got them more comfortable with having more continuity in terms of this decision,” Brolick said. “But again, we do feel the need to put more emphasis upon the pure-99-cent portion of this.”
Wendy’s operates or franchises more than 6,500 locations in the United States and 27 foreign markets.
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