THE NEW CEO of Wendy's has announced $100 million worth of investments in breakfast and digital orders.
The former Pepsi executive Kirk Tanner confirmed this investment on Thursday's fourth-quarter earnings call.
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“When I look at Wendy’s, I see the highest quality food in the QSR industry, which has built a very strong foundation of sales and profit, alongside a very healthy balance sheet,” said Tanner.
“This foundation will serve as a springboard to drive what matters most, accelerated sales and unit growth, so the brand can reach its full potential.”
The investments total $30 million for digital menu boards, $15 million for app updates, and $55 million for marketing over a two-year period to increase breakfast business.
Wendy's intends to "put our money where our mouth is" by constructing additional restaurants, said CFO Gunther Plosch on the earnings call.
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In the fourth quarter, Wendy's restaurant profit margin dropped by 160 basis points to 13.5% of revenues.
The fast food chain blamed declining sales and restaurant profitability on decreased restaurant traffic and higher costs.
“The breakfast daypart is one of the most compelling levers when considering sales growth and margin acceleration opportunities,” said Tanner.
“We can grow our breakfast business significantly without adding incremental labor, which drives meaningful improvement in our restaurant model.
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According to Wendy's executives, sales in the morning will continue to be driven by value, such as its 2-for-$3 promotion and new menu items.
By the end of 2025, Wendy's intends to invest $20 million to introduce digital menu boards to its company restaurants in the United States.
Inside world's 'BIGGEST' Wendy's with thousands of hungry fans waiting hours in queues… & it's 'better than McDonald's'The fast-food chain plans to invest an additional $10 million to "support digital menu board enhancements for the global system,” he said.
“As we continue to show the benefit of this technology in our company-operated restaurants, franchisee interest in digital menu boards should increase."
Wendy's also intends to increase digital sales, which reached a total of $2 billion last year, and to build more offices in the U.K. and the U.S.
The U.S. Sun has reached out to Wendy's for comment.
