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Wendy’s just lost its spot as America’s No. 2 burger chain. Same-store sales fell 7% and traffic dropped 12.5% in the second quarter, the company’s sixth straight quarterly decline, according to Restaurant Business. It’s been a rough go for the burger dynasty. Wendy’s has closed 245 restaurants so far this year. Meanwhile, Burger King’s sales jumped 8.5% last quarter, enough to push Wendy’s into second place behind McDonald’s.
Bob Wright, who took over as Wendy’s CEO in May after leading Potbelly through a turnaround and a $566 million sale, didn’t hold back about what went wrong. “Our quality differentiation has eroded, our value proposition has weakened, and we have not consistently delivered the experience customers expect from Wendy’s,” he said.
Wright pointed to a mix of problems, including reduced discounting that hurt traffic, a “Minions and Monsters” promotion that fizzled, and a struggling breakfast daypart (an industry term for a specific time segment) that some franchisees have opted out of entirely. His fix centers on what he calls “intrinsic value,” food good enough that customers feel like they got more than they paid for, paired with everyday deals and stronger marketing. “It’s going to take time,” Wright said. “But these issues are within our control.”