The Wendy’s Co. is working on its speed of service and order throughput to improve the customer experience, executives said Wednesday.
The Dublin, Ohio-based quick-service burger brand, which with second-quarter earnings reported an increase in North American same-store sales of 1.4%, has also launched a 400 kiosk test that has produced slightly higher checks and some labor savings, said Todd Penegor, Wendy’s president and CEO, on a call with analysts.
“On the speed front,” Penegor said, “a combination of training and credit-card processing improvements is paying off and the entire system has rallied around the benefits of the increased throughput can provide.”
While Penegor did not quantify improvements in speed of service, he said the company was seeing “a nice improvement from the trends, which were going in the wrong direction” last year.
“Our customers expect speed and throughput to be part of a great experience in our restaurants,” he said.
Penegor said the company did training in the first quarter and staffed for peak dayparts and that paid off in the second quarter.
“Our staffing levels have been as good as they have been in a long time in our restaurants, which certainly helps,” he said. “We continue to put more tools into the restaurants to make sure that we're measuring speed consistently across the restaurants so we can coach and help.”
The company also made some software changes in the second quarter to speed credit-card processing, he said.
“We know we still have more opportunity to be even faster than our processing,” he said. “Teams working to that. So those are items that will continue to drive opportunities on speed to service in the back half of the year.”
Wendy’s said the company’s unit renovation program made progress in the second quarter, and the brand now has 53% of the global system on the new image.
At the end of the second quarter, more than 80% of Wendy’s North American restaurants were on a delivery platform.
“Our footprint will continue to expand exceeding our goal for the year,” Penegor said. “The integration of delivery into our mobile app is on track to be completed by the end of the year which will improve our user experience and delivery times.”
Mobile ordering is available in more than 90% of the U.S. system, he said.
“The key to increase sales and success with delivery in mobile ordering lies in increasing customer awareness and driving trial,” he said. “We have a robust playbook of promotions slated for the remainder of 2019 to build our digital awareness and ultimately drive accelerated same restaurant sales.”
The company said it has seen closures steady at about 60 or 70 a year, which executives said they found to be a healthy number, and newly opened restaurants were tracking at average unit volumes of $1.8 million vs. $1 million for the closed restaurants.
Penegor said Wendy’s is keeping its eye on the plant-based proteins that are seeing increasing penetration on menus in the restaurant industry.
“Clearly there's growth out there in plant-based proteins, and we believe it is a trend that that will be here to stay,” he said. “You know folks are looking for options and you know we talk a lot about the flexitarian consumer today. You know it's still a small portion of the overall servings in the restaurant space, but we know it is growing. We're taking a hard look at what the options would be for us in the restaurant.” He noted that the company had limited success with a black bean burger several years ago, but it was “operationally complex.”
For the second quarter ended June 30, Wendy’s net income was up 8.4% to $32.4 million, or 14 cents a share, from $29.9 million, or 12 cents a share, in the same period a year ago. Revenues rose 5.9% to $435.3 million from $411 million in the prior-year period.
Wendy’s, founded in 1969, has more than 6,700 restaurants worldwide.
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