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Wendy-s-Google-Artificial-Intelligence-Test-Columbus-Ohio.jpg The Wendy's Co.
The Wendy's Co. is partnering with Google Cloud for a chatbot-based drive-thru test in June at several restaurants in the Columbus, Ohio, area.

Wendy’s to bookend dayparts with breakfast and late-night push in Q2

As staffing levels return to a pre-pandemic level, burger brand to add promotions for summer

The Wendy’s Co. plans to promote its breakfast and late-night dayparts to “bookend” its dayparts, executives said Wednesday.

The Dublin, Ohio-based burger brand, which posted an 8% increase in systemwide sales for the April 2-ended first quarter, plans to accelerate promotion of its breakfast and late-night dayparts in the second quarter, said Todd Penegor, Wendy’s CEO and president, on an earnings call.

The company has “plans in place to accelerate our momentum at the bookends of the day: breakfast and late night,” he told analysts. “We have plans for increased activity to drive the breakfast business in the U.S. and Canada for the remainder of the year. It will lean into our playbook of building awareness around our craveable products, launching exciting menu innovation and promoting targeted trial-driving offers.

“Furthermore,” Penegor added, “after diligent preparations to ensure our customers will have a great experience, we plan to promote Wendy's late-night business this summer.

“During the first quarter, we already saw an uptick in sales in the daypart, driven by a return to more normalized late-night hours, local advertising and our growing late-night delivery business,” Penegor said. “We are excited to offer our customers the high-quality late-night experience they deserve and believe there's a ton of opportunity ahead of us during this daypart.”

Both dayparts continue to have capacity opportunities, he said, citing the ability to keep more dining rooms open to 10 p.m. and offering drive-thru and delivery until midnight or later. As the brand has progressed on extending opening hours, it is prepared to advertise the late-night daypart nationally for most of the system as it heads into summer, Penegor said.

To enhance the breakfast daypart, he said Wendy’s will look at more opportunities for value messaging, such as the $3 croissant sandwich. The brand is also looking to expand its morning beverage offerings.

“You look at a lot of the growth in the breakfast daypart over the last several quarters,” he explained, it's those who have heavy beverage businesses, whether that's in QSR burger or elsewhere. We'll continue to lean in. We've got some news coming around our Frosty Cold Brew.”

Wendy’s will also be evaluating at its late-night menu offerings, he said.

Among considerations, Penegor said, was making the late-night menu efficient in order to “make it easier close at night, to provide a better opening in the morning — so you can really then continue to support your breakfast business too — to make it the virtuous circle.”

Wendy’s plans to close its U.S. Reef-based restaurants permanently in the second quarter, Penegor said, which lead it to reach its goal of 2% to 3% net new-unit growth in the second half of the year.

He added that several of those U.S. restaurants closed in the first quarter and about 15 Reef closures are expected in the second quarter. In 2021, the brand had expected the Reef partnership to yield as many as 700 restaurants.

Penegor said the recently announced chatbot test with Google Cloud, planned at several Columbus, Ohio-area restaurant drive-thru units, will provide an opportunity for a “faster and frictionless” experience.

“We plan to launch this pilot in June,” he said, “and are incredibly excited about the potential it unlocks to speed of service, customer satisfaction and profitability that this technology could drive over time.” Digital sales for Wendy’s are expected to reach about $1.5 billion this year, he added.

“We really look at this as a speed and through-put opportunity for us,” Penegor said.

For the first quarter ended April 2, Wendy’s reported net income of $39.8 million, or 19 cents a share, up from $37.4 million, or 17 cents a share, in the same period last year. Revenues rose to $528.8 million from $488.6 million in the prior-year quarter.

Same-store sales systemwide were up 8%, with increases of 7.2% at U.S. restaurants and 13.9% at international units.

Wendy's, founded in 1969, has about 7,000 restaurants worldwide.

Contact Ron Ruggless at [email protected]

Follow him on Twitter: @RonRuggless

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