NEW YORK Wendy’s/Arby’s Group Inc. said Tuesday that turnaround plans for Wendy’s include the delay of a systemwide breakfast introduction until 2011, as the chain retools its offerings with product tests in just three markets.
Speaking at the seventh annual Cowen & Co. consumer investment conference in New York, company chief executive Roland Smith said Wendy’s missed the mark on its foray into breakfast and will now research and test new menu items and marketing strategies in Pittsburgh, Kansas City and Phoenix. After years spent attempting to launch a breakfast platform, Wendy’s also will reduce the number of locations serving breakfast from the current 850 restaurants to between 450 and 475 units. After the new products tests and evaluation of the daypart’s returns, Wendy’s targeted a nationwide breakfast rollout in 2011.
The company did not provide details on any new products.
The change of plans differs from comments made by officials at Wendy’s/Arby’s Group as recently as November, when they said Wendy’s would continue to focus on breakfast. Atlanta-based Wendy’s/Arby’s Group was formed late last year when the parent company to the Arby’s sandwich chain purchased Wendy’s, which is based in Dublin, Ohio. Its chief executive Smith also is the CEO of the Wendy’s chain.
For 2009, Wendy’s will direct its marketing focus on its higher-quality brand identity, including fresh, never frozen beef and improved chicken and buns, the company said. Wendy’s value menu, anchored by three sandwiches for 99 cents, also will be featured heavily. The chain is attempting to improve its margins by 5 percent from now through 2011, after years of slowed sales and deflated profit growth. It also will cut about $60 million in expenses during the next three years.
Wendy’s/Arby’s operates or franchises about 10,000 restaurants and posted systemwide sales of about $12 billion in 2007. The company’s fiscal 2008 results are expected in early March.