How Wendy’s plans to keep its breakfast sales growing

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Wendy’s breakfast got better towards the end of 2021, thanks to the cheap cookies.

A Buck Biscuit promotion in the morning helped the burger chain’s same-store sales rise 6.1% in the fourth quarter, and it helped the company’s booming morning portion reach 8.5% of sales.

The Dublin, Ohio-based company expects to improve further this year. “We will continue to invest beyond the United States,” CEO Todd Penegor told investors Tuesday, noting that the company plans to invest $11 million in additional advertising this year to drive more morning sales.

Wendy’s thinks it can increase breakfast sales by 10-20% this year, which would add up to $182,000 in sales per store on an annualized basis.

The company introduced breakfast in early March 2020 with remarkably strong sales, despite a few limited hours and a drive-thru-only model, both designed to ensure franchisees can turn a profit on the day.

The pandemic interrupted those plans, destroying morning commuting habits as consumers began to work from home. Yet the drive-thru-only model proved fortuitous, as much of the fast food business shifted to these lanes anyway.

And consumers have changed the way they eat breakfast. Rather than stopping at a drive-thru on the way to work, they stop there later in the morning.

Wendy’s has since relied on its marketing strength to get people interested in its breakfast day. The Buck Biscuit promotion, offering customers one of the chain’s cookie sandwiches for $1, was part of an effort to raise awareness and entice customers to try the part of the day. “The Buck Biscuit promotion really brought in a lot of new users to the breakfast category,” Penegor said.

Overall, breakfast sales were up 25% last year, partly because there were two more months in the year, but also because of what executives at the company said to be a growing awareness of the day. “We were very pleased with our breakfast performance,” Penegor said.

Executives said there were signs consumers were returning to their pre-pandemic norms. Some of the morning traffic that had stopped at chain restaurants at 9 a.m. started arriving at 7 a.m. This gives executives confidence that they can increase sales even further this year.

“Models are starting to come back,” Penegor said, noting that the CDC’s mask guidelines make people more comfortable returning to the office. “People are starting to go back to work.

He noted that more people in the office will “definitely help us be successful this year.”

There are other data elements that have confident leaders in the time slice. The first restaurants that tested breakfast, for example, are now generating $4,500 per week, per store, suggesting that consumers have incorporated restaurants into their morning routine.

“Our rehearsal continues to be very strong,” Penegor said. And customer awareness is also high. “We’re basically on par with Burger King, which has been in the business for a very, very long time,” he added.

So the company hopes customers trying the breakfast will keep them coming back. Hence the marketing investments.

Wendy’s plans to announce the game of the day during the NCAA Men’s Basketball Tournament. Earlier this year, it launched its first new limited-time breakfast offer, a Hot Honey Chicken Biscuit sandwich. “We have a lot of advantages in the breakfast market here,” said chief financial officer Gunther Plosch.

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