ATLANTA Wendy's/Arby's Group Inc. executives on Thursday outlined several upcoming new products, including coffee-flavored Frosties and boneless wings and other chicken products at Wendy's, and more Roastburger varieties and value offerings at Arby's.
The new products are designed to drive sales at both brands, Roland Smith, Wendy's/Arby's president and chief executive, said in a conference call with investors. The company on Thursday reported first-quarter results, which included a systemwide same-store sales increase of 1 percent at Wendy's North American stores and a decline of 8.7 percent at Arby's North American stores.
This month, Wendy's will add to its Frosty line with a Frosty-cino Shake, which is made with a vanilla Frosty base and coffee syrup and comes topped with whipped cream and a chocolate drizzle. The chain also is adding a Coffee Toffee Twisted Frosty, which is a vanilla Frosty blended with coffee syrup and chocolate-covered toffee bits. Both treats can be made with Wendy's chocolate Frosty base by request, a spokesman said.
In the product pipeline at Wendy's this summer are additional premium chicken menu items, including boneless wings, which Smith said have been well received in test markets.
"At Wendy's, we are just beginning to re-establish leadership in new product innovation," Smith said.
In the fall, the chain will introduce a new signature hamburger, which Smith said would "enhance Wendy's reputation for serving the best hamburger in the QSR business."
Smith said Wendy's also is working to revamp its value menu with more items that range in price between 99 cents and $1.99. Some of the higher-ticket value items will come from Wendy's regular menu, he indicated
"We're looking at some of our items that we think we ought to reintroduce to the customer because they are great values and they are unique items, such as our baked potatoes and chili, which we don't need to sell for 99 cents because they are unique," he said.
At Arby's, plans include more varieties of the chain's new Roastburger sandwiches, which are made with roast beef and classic burger toppings. The company said the Roastburgers were a big sales driver in March, when they were introduced and promoted with national television advertising.
Arby's also will debut sandwiches made with other kinds of roasted meats, Smith said. The chain is already promoting a Roast Chicken Club sandwich, made with sliced roasted chicken, pepper bacon and Swiss cheese.
Smith said the Roastburgers and other roasted meat sandwiches would emphasize Arby's as a provider of premium food. At the same time, however, he acknowledged pressure from competitors' deep-discounting tactics and said Arby's planned to add at least one value offering to the menu by the end of the year.
"Our sandwich competitors continue to discount at unprecedented levels and many QSR chains continue to aggressively promote dollar menus," he said. "In order to compete more effectively for the value customer, we have been testing several value-oriented menu offerings on both new and existing products. We plan to roll out one or more of these value offerings later this year to better balance our entire menu and pricing strategy."
The new-product update came as Wendy's/Arby's Group reported a loss of $10.9 million, or 2 cents a share, for the first quarter ended March 29. The results included $15 million in one-time charges related to last year's merger of Wendy's International Inc. and Triarc Cos. into Wendy's/Arby's Group.
First-quarter revenue totaled $864 million, the company said.
The year-ago first quarter closed before the merger and only included results from Arby's parent Triarc. In that quarter, Triarc posted a net loss of $67.5 million and revenue of $302.9 million.
Wendy's/Arby's operates or franchises 6,623 Wendy's units and 1,171 Arby's locations.
Shares in Wendy's/Arby's fell nearly 11 percent on Thursday to close at $4.43.
Contact Molly Gise at [email protected].