Reporter's Notebook

Could Wendy's give breakfast another try?

Every now and then, Wendy’s tests breakfast, and every time the chain has backed off.

But that doesn’t necessarily mean Wendy's won’t give the morning meal another shot — some day.

Speaking on Bloomberg TV, Wendy’s CEO Emil Brolick wouldn’t rule out another shot at breakfast. “Oh no,” he said. “But if we enter it again, sometime in the future, we would do it in a way that would really separate us, that would differentiate us.”

“We’re not saying never,” he added later. “We’re just saying not now.”

Wendy’s is sort-of alone among large, quick-service chains. It is the only one among the big three burger chains that doesn’t offer breakfast. And the number of QSR competitors that don’t offer the morning meal keeps shrinking — after Taco Bell entered the market this year.

“We have tested breakfast many times over the years and you know we feel we’re virtually the only large national chain that hasn’t gotten into breakfast,” Brolick said. “It’s very difficult to enter that space today and commit the kind of marketing resources that we feel would be necessary.” You can watch the entire video here.

The lack of breakfast could be viewed as a missed opportunity for Wendy’s, because breakfast is the only major daypart in which the restaurant industry is adding traffic right now, according to the market research firm NPD Group.

Arguably the best example of breakfast’s popularity lies with Wendy’s biggest competitor, McDonald’s, which suffered from a 3.3 percent decline in same-store sales in the third quarter — but still grew its breakfast business.

Then again, franchisees have indicated that Wendy’s would be better off without the daypart. More than one operator has told me that Wendy’s recent success is due in part to the franchisor’s decision to stop testing breakfast and instead to focus on lunch and dinner.

And breakfast is difficult. Those brands that offer breakfast note that there are considerations a concept has to take into account in the morning that they don’t take into account at other times of day. For instance, a location has to be on the right side of the road as traffic commutes in the morning. People won’t turn left to go to breakfast.

It’s also habitual, depending heavily on a person’s routine. So any breakfast effort has to come with a dose of patience because it takes time to build the business.

That difficulty was not lost on Brolick. “It’s absolutely the most habitual of the dayparts,” he told Bloomberg. “It has the highest level of loyalty. You get up in the morning and you have a routine. You follow that routine. Once you get embedded in that routine, it’s hard to change people from that.”

All that said, there is hardly a rush for Wendy’s to enter breakfast, anyway, given the performance of its restaurants in the dayparts they do have. Consider that Wendy’s unit volumes without breakfast are about $1.5 million. By comparison, Burger King’s volumes are about $1.2 million. And that’s with breakfast.

 

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