Wendy's Elevating Breakfast Game to Captivate Customers
Pressing ahead in its quest for breakfast dominance, Wendy's revealed plans this week to fork over an additional $10 million for breakfast advertising in 2021. With this investment, the chain will shell out a whopping $25 million overall on barnstorming its breakfast offerings.
The ultimate goal? Drawing more folks to sample the goods on the breakfast menu and persuading them to drop by Wendy's whenever they're off to work or school.
"No matter the norm, we've got to be a part of it," Wendy's CEO Todd Penegor shared during a Wednesday conference call discussing the company's financial results for the second quarter. "That's why we're committing an extra $10 million to advertising to make sure our message gets across loud and clear."
McDonald's has reigned supreme in the breakfast arena for eons. Yet, competition has stiffened over the years, and an ever-growing number of eateries are keen on carving out a piece of the a.m. market pie. Dunkin' has tinkered with healthier options and launched a plant-based breakfast sandwich, while Taco Bell seeks to charm breakfast-goers with morning burritos, tacos, and quesadillas.
Wendy's entered the fray a bit late. In March 2020, a nationwide breakfast menu debuted, just as parts of the country were shuttering for pandemic-related reasons.
However, Penegor remains optimistic, hinting at "fun sampling events to get our food into the mouths of consumers." This weekend, Wendy's is gifting complimentary croissant breakfast sandwiches to lucky diners.
Fried Chicken Bites with Honey Butter, two for $4
Back in late '19, Wendy's announced a two-pronged plan to create 20,000 jobs and pour $20 million into breakfast. Critics at that time questioned the sanity of the bet on breakfast. Wendy's offense against the early-morning fare could be seen as failing in the past.
But those breakfast sales tanked last year as the pandemic turned everybody's morning routines upside down. Wendy's insisted, however, that breakfast was holding its own, and the trend continued into 2021.
"Our breakfast sales grew by 10% quarter over quarter," Penegor revealed. The Honey Butter Chicken Biscuits, which cost just $1.99, and breakfast combos for two at $4 have played a significant role in driving growth, he added, emphasizing that "these marketing campaigns have been crucial to our success, as we've seen many customers try our breakfast options."
Penegor stressed that the chain wasn't comparing breakfast sales to those from the same period in the previous year. Instead, they observed an increase of 16% in breakfast sales at US eateries that had been open for a minimum of 15 months compared to the same period in 2020. That's a nearly 12% hike compared to figures from 2019 before the pandemic.
Penegor expressed confidence that the additional advertising dollars will push breakfast sales for 2021 to jump by as much as 30%. By year's end, about 10% of Wendy's total revenue could be due to breakfast, he suggested.
Further Reading
With a $10 million ad spend boost, Wendy's aims to ensure its breakfast advertising message resonates and lures more individuals into sampling its morning offerings.
While McDonald's still holds the top spot in the breakfast market, the level of competition has grown in recent years, with numerous restaurants vying to secure a piece of the morning pie. In response, Wendy's plans to engage customers with fun tasting experiences, such as distributing complimentary croissant breakfast sandwiches this weekend.
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Enrichment Data
Wendy's approach to boosting breakfast sales embraces a strategic trifecta of plans:
- Menu Expansion: Wendy's has successfully introduced popular items like the Frosty-ccino and breakfast burrito, fueling a staggering increase in afternoon sales. Additionally, the chain plans to carry on innovating in the breakfast category, unveiling more coveted products later in 2025.
- Advertising Intensity: Wendy's has heightened its promotional efforts for breakfast, which has contributed to a 6% surge in sales during 2024. The company intends to continue dedicating more ad dollars to morning mealtime versus its lower share of sales in this area, directing its resources towards continued growth.
- Digital Engagement & Incentives: Wendy's digital mix has expanded significantly, providing valuable insights that elevate customer experiences and offer more enticing in-app promotions. By deepening loyalty ties and introducing unparalleled, time-limited deals through the Wendy's app, the chain looks to boost breakfast sales even further.
Impact on Broader Business
- Restaurant Sales Growth: Wendy's breakfast sales momentum has bolstered its overall same-store sales growth. In 2024, breakfast sales trumped the fast-food burger category, recording a 6% climb in earnings.
- Global Expansion: The US breakfast market triumph has also spurred international expansion. In 2024, both international systemwide sales and same-store sales climbed 9% and 2.8%, respectively, contributing to overall performance.
- Financial Performance: Wendy's continued focus on breakfast has had a positive effect on its financial health. The company reported back-to-back years of global same-store sales growth in 2024, along with a 5.4% uptick in systemwide sales during Q4.
