Refreshed offerings that resonate
Here’s a question Wendy’s has faced lately: Are guests willing to embrace the $5 price point over the chain’s No. 1 and most-recognizable platform—the 4 for $4?
Some of the largest players in quick service are driving traffic through discounting on premium-end products right now. Penegor said Wendy’s isn’t one of them. The company has its core business and everyday prices, as usual: coupons, mobile offers, and other promotions that drive traffic. But the main difference, Penegor said, is Wendy’s continues to work on menu architecture designed for guests to climb the value ladder. No matter the occasion. In recent quarters, Wendy’s lost share on the dollar front, meaning it didn’t do as good a job trading customers on once they decided to traffic the restaurant. Essentially, they came in for the deals and left after individual purchases.
Wendy’s changed that in Q1 by mainly launching platforms over products, and deals that have legs when it comes to future innovation. Additionally, they fit right into Wendy’s marketing wheelhouse. They also happen to circle the $5 price point over the $4 one, which aided check.
Wendy’s unveiled the combo offer $5 Biggie Bag, $5 Giant Junior Bacon Cheeseburger, and a Made to Crave menu that skews higher, with options, like the S'Awesome Bacon Cheeseburger, running roughly $5.29.
Penegor said the Biggie Bag wasn’t just a nice check builder—it drove incremental traffic in Q1. So this was a deal that struck two chords of Wendy’s menu goals and bridged the barbell promise: Not just higher prices to move the top-line, but also traffic you’d typically see from a lower-priced LTO.
What’s also happened is Wendy’s now has three platforms to pulse news into. The Biggie Bag can change products and price points. It’s not locked in. The company can innovate around the branding more than the current offerings.
On the Made to Crave lineup, Wendy’s just added three new chicken sandwiches to the offerings, including one with avocado and bacon. Penegor said that brought just one new SKU in, "so we'll be able to continue to trade folks up on the top on that, but we're keeping the balance."
The strategy is key to Wendy’s comps growth during a calendar year it expects traffic on a full-year basis to be flat to slightly down—that coming off 13 consecutive quarters of holding or growing category share. Wendy’s will see more benefit from price than transactions this year. So it’s critical to build a balanced high-low strategy that doesn’t rely solely on deep value for visits. “We brought a lot of folks in,” Penegor said. “Now, we’ve got to continue to trade folks up. That’s healthy for our margin and it trades folks up into some of our best offerings on our menu.”
To put it simply, Wendy’s needs platforms it can refresh and count on, and it believes it’s hit with Q1’s standouts.