Going hand-in-hand with the accelerating breakfast daypart is the budding digital business. Wendy’s exited Q1 with digital mixing roughly 8 percent, an increase from just over 6 percent in Q4. Penegor said the boost was driven by growth in both delivery and mobile ordering. Delivery was aided by promotions that raised awareness and new trial while mobile ordering was lifted by Wendy’s strong loyalty program that includes 13 million users. Of that amount, three million are fully engaged and active customers.
“We've been relatively flat on our awareness around digital activity, whether that be delivery or mobile ordering,” Penegor said. "Those are opportunities ahead of us, to continue to get more customers aware that you can have a digitally enabled order from The Wendy's Company, which gives us a lot of confidence that we can continue to build on the program. The customer satisfaction for the folks that are in the loyalty program is quite high. They like the program. They like the ease of use of it at the restaurant level. And our opportunity is to have our crew even engage more to drive awareness even at point of sale.”
Wendy’s has started to leverage consumer data and engage customers on a 1:1 basis. The CEO noted that as consumer behavior continues to change—along with the proper technology investments—Wendy’s is well on its way to achieving its goal of 10 percent digital mix in the U.S.
Mobile ordering brings a 15 to 20 percent higher average check while delivery experiences a 40 to 50 percent jump. Penegor said he expects average ticket to remain elevated through the summer and into the fall before full mobility returns. In terms of the drive-thru, speed has remained the same even though Wendy’s is seeing 10 percent more items per order. Meanwhile, 85 percent of dining rooms are open, but roughly 50 percent of customers are coming inside to grab takeaway orders. Pre-COVID, one-third of Wendy’s sales came from the dining room.
“It will take a while to get back to that third dining room mix over time, and that’s why we continue to really focus on how do we make our parking lots frictionless transaction centers and continue to drive speed at the drive-thru, get more folks into mobile ordering so they can get through that line faster, complement that with mobile grab-and-go and curbside,” Penegor said. “All of those initiatives are underway.”
Same-store sales were also accelerated by innovation in afternoon/evening dayparts, including the Jalapeño Popper Chicken Sandwich and Salad. Additionally, the elevated Classic Chicken Sandwich proved to be a key component of Wendy’s 2 for $5 promotion. The item is selling more than twice as much as the previous version, and continues to drive a strong large sandwich sales mix and higher average check.