Wendy’s will continue to evaluate its breakfast daypart as part of a turnaround strategy CEO Bob Wright laid out on a Friday earnings call.
The fast food chain, which has struggled with several quarters of traffic and sales declines, said earlier this year that it would allow franchisees to opt out of breakfast to focus more on lunch, dinner and late night.
“Breakfast is important to us, and it's a complex topic that frankly we're still analyzing very deeply,” Wright said. “It can't be disconnected from the broader strategy and the work that we're doing there.”
However, the removal or reduction in breakfast hours at some restaurants played a part in the chain’s 12.5% U.S. traffic decline during the second quarter, CFO Steve Cirulus said on Friday. A reduction of discounting also contributed to this decline.
While some franchisees opted out of breakfast during the quarter, the majority of the system still offers the daypart, Wright said.
“For some franchisees, the opt-out was really helpful,” Wright said. “It provided a little bit of a relief valve, but it's still a key area that's under evaluation for us. We need to get our footing on the remainder of the strategy before we start deciding exactly where breakfast fits into that.”
Wendy’s originally launched the breakfast daypart in 2019 after a few failed attempts in the past. The daypart blossomed in the early years, with management previously saying it expected the channel to eventually generate $1 billion in sales.
Today, breakfast makes up between 5% and 5.5% of Wendy’s overall sales, Cirulus said. A year after its launch, breakfast sales represented 8% of sales in Q2 2020.
“We want to make sure that we're looking at this as a brand, as a complete menu in the context of the consumer, of the franchisees and where we think growth is going to come from,” Cirulus said.
