The Wendy’s Co.’s beef supplies have returned to “near-normal levels” after the brand experienced disruptions in early May because of the coronavirus pandemic, the company said Monday.
The Dublin, Ohio-based quick-service brand, in a business update, said its systemwide same-store sales shifted to positive in the last week of May as the company continued to assess the impact of the coronavirus pandemic and ensuing restaurant restrictions.
Wendy’s said the beef-supply disruptions did affect digital sales for the fiscal May period, which were about 4.5% of systemwide domestic sales.
“This business was impacted by the temporary disruption in beef supply as items were temporarily removed from mobile order and delivery menus if there were beef-supply issues at an individual restaurant level,” the company said.
Beef suppliers, impacted by coronavirus outbreaks and closures in early May, faced production challenges, Wendy’s said.
“As a result, some menu items were occasionally in short supply at some Wendy's system restaurants,” the company said in the business update. “The company and its supply-chain partners effectively managed through this disruption by allocating beef to all Wendy's system restaurants, with deliveries occurring two or three times a week, consistent with normal delivery schedules.
“The company also shifted its marketing efforts in the short term to focus on chicken products in an effort to alleviate pressure on beef demand,” it said.
Despite the beef-supply challenges, Wendy’s said its global same-store sales improved each successive week in May and turned positive “in the low single-digit range” in the last week of the month.
For U.S. restaurants, same-store sales for the month ended May 31 were down 1.9%, compared to negative 14% in April (which ended May 3), and for international restaurants same-store sales for May were down 17.7%, compared to negative 28.3% in April.
Quarter-to-date, as of May 31, same-store sales were down systemwide 9.9%, including negative 8.6% domestically and negative 22.4% internationally, Wendy’s said.
“Breakfast in the U.S. continued to perform very strongly in the fiscal month of May at approximately 8% of U.S. systemwide sales,” the company noted.
The majority of Wendy’s units continued to operate drive-thru and delivery, and dining rooms were beginning to reopen as state and local restrictions eased. About 99% of Wendy’s 5,861 U.S. restaurants were operating, and about 81% of its 945 international units were operating.
“Restaurants that remain closed in the U.S. are primarily due to their locations (e.g., unique sites such as malls),” the company said, “Restaurants that remain closed Internationally are primarily due to country-wide closure mandates.”
As of May 31, Wendy’s said it continued “to maintain a healthy level of cash on hand at approximately $375 million.”
The company said it expected to end its business updates and return to its traditional quarterly reporting, with its second-quarter earnings release on Aug. 5.
Wendy’s has more than 6,800 restaurants worldwide.
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