A honey butter chicken biscuit sandwich served during breakfast hours. The return of Wendy’s to Europe within 18-months. 50-piece orders of spicy chicken nuggets being ordered by those that saw a bullish Chance the Rapper tweet about them. The Baconator ordered on the Wendy’s app and delivered soon thereafter by Grubhub.
Wall Street hit Wendy’s stock hard in September amid the emergence of Penegor’s more aggressive growth strategies, notably the re-launch of breakfast. The stock has stabilized a bit, rising about 4% in October. The main concern among analysts — generally taken by surprise by the shift in Wendy’s growing plate of initiatives — is that the company is sacrificing near-term profits in another breakfast launch that may not work well due to serious entrenched competition.
Todd Penegor: We have been thinking about it for quite some time. We looked at it and thought what would it take to get back into breakfast and when would we be ready. We started looking at all the elements of our business. We have more than 50% of our restaurants re-imaged. We have over 50% of our franchisees new, and with a long-term view on the business.
But our marketing team has done a fabulous job with mainstream media and social media in getting folks to show up in a big way. And I think there will be a lot of dialogue around breakfast and we will be able to turn that spotlight toward us. I think we are going to get a lot of folks to show up early and we will have to be ready.
Right now we have made it very simple. We are leveraging all the existing equipment. All of the SKUs are sandwich based. And we can do all this with three people — basically two people to open the restaurant in the morning and then prep, and then one to work the drive-thru register. We have easy sandwich builds, but we have some unbelievably great-tasting food.
Sozzi: Do you envision having trouble hiring 20,000 people for breakfast in such a tight labor market? So, we are planning for that strong competitive response. And I am sure it will come. We feel good. There could be several winners in breakfast. There will be a lot of discussion around it. But if you start looking at some of the small mom and pop or regional chains that will have to be shifting money from lunch and dinner into breakfast, it will become more challenging for them.