Wendy’s hopes to win back customers, but it knows it still has a lot of work to do.
Interim CEO Ken Cook acknowledged during Wendy’s third-quarter earnings call that the chain is struggling in the domestic market.
“In our U.S. business, sales remain under pressure and we are taking urgent action to return U.S. corporate sales to growth. We are making meaningful progress on key actions to enhance the customer experience, and we are seeing the return of this in our U.S. corporate-operated restaurants, which significantly outperformed the system as a whole in the third quarter,” he said.
According to its third-quarter financial report, system-wide same-store sales fell 4.4%, and U.S. sales fell 4.7%.
The company plans to address the problem by doubling down on prices while closing hundreds of other underperforming stores.
As part of its efforts to address these operational and profitability challenges, Wendy’s has begun closing underperforming U.S. stores to focus resources on stronger restaurants and support its broader Project Fresh turnaround plan.
“On our last earnings call, I outlined three key initiatives: better understanding our customers, streamlining our programming and execution and working more closely with our franchisees, One Wendy’s,” Cook shared.
He also shared the company’s plans to close stores, although he didn’t say it directly.
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“In addition to these initiatives, we have made the strategic decision to prioritize average unit sales (AUV) growth over net volume growth in our U.S. operations. As part of this strategic shift, we launched Project Fresh, a comprehensive turnaround plan designed to drive profitable growth and long-term value in our U.S. operations,” he added.
The chain will expand its AUV by closing underperforming stores, which should shift customers away from those stores and toward its remaining locations.
“These actions will strengthen the system and enable franchisees to invest additional capital and resources in their remaining restaurants,” Cook said.
Wendy’s has started offering value meals.Shutterstock · Shutterstock
Wendy’s customers have noticed that its classic discounts and dining deals have become more expensive over time. The chain was once known for its four-pack Biggie Bags for $4 and $5, but now the sale prices have jumped to $6 and even $7.
In response, Wendy’s recently launched its new Biggie Deals line, designed to provide cost-conscious diners with more choice and value.
