Wendy’s Doubles Down on Dollar Menu

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Although it bumped Burger King out of second place by positioning itself as a more upscale fast-food burger chain, now Wendy’s is supersizing its value menu by adding a second tier of under-$2 items in addition to a core group of 99¢ offerings. 

The company missed analysts’ earnings expectations last quarter, while rival McDonald’s recovered from an October dip in sales by heavily promoting its dollar menu. (The thousands of McDonald’s stores that stayed open on Thanksgiving helped lift sales too.)

(MORE: Top 10 Iconic Junk Foods)

Wendy’s appears to be taking a page from McD’s playbook. Industry publication Burger Business reports that the chain plans to roll out its “Right Price Right Size” value menu, now being tested in some locations, systemwide next year.

In a conference call last month, president and CEO Emil Brolick told investors, “We have lost some share in the value-menu area,” and said  the new menu would help the company reverse that slide. Brolick said one culprit was a lack of consistency among franchisees as to which items were on the menu, which confused customers.

According to research firm Technomic, Wendy’s took the No. 2 spot from Burger King among fast-food burger brands last year. Helped along by Burger King’s sluggish response to changing tastes among fast-food diners, Wendy’s stole the King’s crown by focusing on higher-end (and higher-priced) items like bigger, more natural-looking patties and specialty sandwiches like an asiago ranch chicken club.

The problem was, it got almost too good at aligning itself with the higher end of the market. “The new menu is intended to better balance Wendy’s overall menu, which had gotten top-heavy through [the addition] of higher-priced sandwiches,” Burger Business observed.

(MORE: Hot Buns! In Fast Food, a New Focus Is on What’s Outside the Sandwich)

“We do believe that the number of price-value-sensitive customers out there is not insignificant,” Brolick told analysts. He’s right. Bonnie Riggs, a restaurant-industry analyst at research company NPD Group, says fast-food diners, especially those under 35, are abandoning combo meals in favor of the dollar menu to save a few bucks.

Wendy’s new 99¢ menu will include six core items: value-sized chicken nuggets, fries, soda, small Frosty, junior cheeseburger, and crispy chicken sandwich. There will be a second tier of more profitable items priced from $1.29 to $1.79 that franchisees can choose to offer or else charge what they want, as long as prices stay below $2, Burger Business said. More choice for customers, higher margins for Wendy’s — everybody’s happy.

Burger King’s slogan is “Have it your way.” Maybe Wendy’s should be “Have it both ways.”

MORE: How Wendy’s Finally Knocked Burger King Down a Notch

8 comments
N8Ball
N8Ball

French kissin' french fries, in my Fruit of the Looms,......I get deeper penetration, WITH A FORK AND A SPOON!!!!

sverry7
sverry7

So why does Wendy's get free advertizing in Time?

DavidClaudeWarlick
DavidClaudeWarlick

Put a salt shaker on each table.  Put no salt in the food itself.  I might stop by if the food were unpreserved (no table salt, sea salt, cane sugar, dried cane juice) and somewhat natural (no animal hormones or genetically modified plants).  Price has nothing to do with my absence.

AdamSmith1
AdamSmith1

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davidhoffman
davidhoffman

The popular one dollar menus could be maintained forever.  I am somewhat impressed that they lasted this long.  It really is time to switch to a  two dollar menu for all the food items, except for fries.  In reality I would expect a "buck and a half" menu to be produced.  It is not as easy to  advertise as a dollar menu, but some ad agency will find a way.  

elmnt925
elmnt925 like.author.displayName like.author.displayName 2 Like

they went from 5 piece nugget to 4 piece for the same .99

i guess budget cuts are everywhere. 

TheCoryDorsey
TheCoryDorsey

"bigger, more natural looking patties"

 Square is ""natural-looking? Since when?