Breakfast, despite everything, ended the year at 7 percent of sales as Wendy’s reported growth of 5.5 percent in the fourth quarter. Breakfast contributed about 6.5% of Wendy’s comparable store sales in the United States and “led to a significant increase in restaurant AUVs in 2020,” said CEO Todd Penegor at the time.
The following quarter, breakfast remained at 7% even as Wendy’s business for the rest of the day increased “very, very strongly,” Penegor said, suggesting that the overall recovery will follow breakfast. Comparable store sales increased 13% during this period.
And Wendy’s did it all with breakfast around the 50% brand awareness mark, which means there’s still plenty of leads to pursue.
So much so that executives said they expected to increase breakfast by 30% in 2021 through a combination of expansion of lineups year-over-year via higher average weekly sales, as well as a two-month rollover where Wendy’s had not launched a nationwide breakfast. In addition, increased marketing now that the reduction program has ended.
In total, Penegor said, Wendy’s is confident breakfast can reach 10% of sales by the end of 2022. If it does, we’re talking about a business of around $ 1 billion.
There is reason to be optimistic. One of the best potential predictors of what’s to come could be the 300 legacy restaurants that offered breakfast before Wendy’s rollout in March 2020. These stores have increased the length of the day to over 10 percent of the mix. .
It’s about creating a habit, noted CFO Gunther Plosch in May. “It’s a matter of time,” he said. “Breaking the habit is all about investing, isn’t it? This is why we are investing around $ 15 million [in 2021] to make sure we do the right thing: driving awareness, awareness leads to trial, trial leads to repetition of trial and repetition leads to growth.
In the first quarter of 2021, all of Wendy’s breakfast metrics improved. Sales dollars have gone up. Awareness raised. Repeat the checked cases.
Wendy’s did not hesitate to position itself throughout and in the future. Wendy’s Marketing Director Carl Loredo called the competitive field “the world of frozen arches,” a not-so-veiled reference to McDonald’s, which just six years ago held a 17.4% share in the morning. according to Euromonitor.
If you look at why Wendy’s was born in 1969, says Kane, “it must have been a better alternative than McDonald’s and Burger King 50 years ago. And this is still the case today.
So in that regard, Wendy’s breakfast return mirrors some of her precedents. Quality first is always the banner. “We had to be a significant better alternative in their perception of food quality than the choices that were already part of their daily routine,” says Kane.
Customers have recognized it. Perceptions of quality and value did not suffer during COVID.
“We came into the morning as an outsider,” Loredo said in January. “And we started it in the middle of COVID. And yet, here we are, less than a year from the start, and we compete with competitors who have been in the market for 50 years. Literally go from a person’s breakfast to a someone’s breakfast, and loving every minute of it.
Breakfast quickly became Wendy’s top-rated part of the day, in terms of guest satisfaction scores. He also appreciated the high repeat orders. All the while, Penegor said, a “pretty large percentage” of existing customers still hadn’t tried it.