Wendy's set to unseat Burger King as nation's #2 chain

[NYBuckeye96]

http://online.wsj.com/article/SB1000142 ... 96622.html

DECEMBER 21, 2011.

Wendy's Stages a Palace Coup
Despite Fewer U.S. Locations, Chain Set To Unseat Burger King as No. 2 in Sales.

By JULIE JARGON

Burger King, the perennial No. 2 in the burger wars, is about to be beaten out by a pigtailed girl.

Wendy's Co. is poised to pass Burger King Holdings Inc. in U.S. sales, trailing only industry behemoth McDonald's Corp., in the first reordering of the industry-leading trio since Wendy's was founded in 1969.

Americans are expected to spend more than $175 billion at fast-food restaurants this year, up about 3% from 2010. Wendy's U.S. same-store sales are forecast to rise 1.1%, while Burger King's U.S. and Canada same-store sales will drop 3.9%, according to market-research firm Technomic Inc.

That means sales at Wendy's U.S. restaurants—both franchised and company-owned—are on track to be $8.42 billion or $53 million higher than Burger King's this year, according to an analysis conducted for The Wall Street Journal by Technomic. That's in line with expectations from some other analysts. The outcome will become clear when the two companies report fourth-quarter results early next year.

Wendy's has gained on Burger King without opening more restaurants: its number of outlets in the U.S. has remained flat, at roughly 5,800, compared with Burger King's approximately 7,200 U.S. stores. McDonald's is the far away the leader with more U.S. restaurants than Wendy's and Burger King combined, and almost four times the U.S. systemwide sales than either of its direct rivals.

Wendy's fortunes have been revived since investor Nelson Peltz's Triarc Cos. bought the chain in 2008. Much the way McDonald's has broadened its menu and remodeled its restaurants, Wendy's has upgraded its menu, changing the lettuce in its salads and softening the edges of its trademark square burgers. It has also raised some prices.

The changes come amid intensified competition for market share in the fast-food industry, as room for restaurant growth has dwindled and the wobbly U.S. economy has prompted many to eat at home instead.

Burger King reports its U.S. and Canadian sales together, but Technomic extrapolated the data to show that Burger King had 2010 U.S. systemwide sales of $8.7 billion, just $370 million higher than Wendy's, compared with a $542 million difference in 2009.

Analysts focus on systemwide sales in assessing relative size in the U.S., rather than company revenue, because some chains franchise many more restaurants than they own and collect royalty fees from franchisees.

Wendy's spokesman Denny Lynch declined to comment on the possibility of surpassing Burger King. "We're staying focused on our business," he said.

Wendy's has benefited in part from weakness at Burger King, which analysts say has suffered in recent years from a series of management and ownership changes, a lack of menu development and an over-reliance on young adult customers at a time when high unemployment hit that market hard.

Burger King spokesman Miguel Piedra said speculation about market rankings in the U.S. "highlight[s] the degree of competition" in the sector, but that such projections "do not illustrate a complete picture of the industry's competitive landscape, globally." He said Burger King has nearly 12,400 restaurants world-wide, almost double the number of Wendy's around the world. Burger King is "focused on driving strong expansion in its many markets around the world," and that "will strongly position the brand" to remain the No. 2 burger chain world-wide, he said.

Wendy's has focused on improving the dining experience.

Shortly after its acquisition by Triarc, Wendy's began an 18-month process of interviewing 10,000 consumers. "They told us they liked the idea of fresh foods with as little processing as possible and ingredients they were familiar with," Mr. Lynch said.

The customer survey led to the "reinvention of our core menu," he said. Out went the traditional iceberg lettuce topped with tomatoes and onions, and in came four new salad varieties featuring 11 different greens and new ingredients like apples, pecans and asiago cheese.

Wendy's then turned its attention to French fries, switching from a mixture of potato varieties to only Russet potatoes, sliced with the skin still on, and sprinkled with sea salt.

More recently, Wendy's beefed up its burgers, switching to a looser grind of beef to make its burgers thicker and juicier. The company also refashioned its trademark square burgers with softer edges after customers said those burgers looked processed, even though they were fresh.

Andrew Ofisher, a 24-year-old software engineer, went to a Wendy's in downtown Chicago last week to try the new burger. "This was more like a normal burger, not like a fast food burger," he said. "There was actually a pink part to it; it wasn't burned to a crisp."

Tim Perry, a 30-year-old product manager who ordered a spicy chicken sandwich, likes Burger King but goes to Wendy's more often. "It's good, it's fresh and you've got the sea salt fries," he said.

More customer visits and higher prices are showing up in Wendy's sales this year. The company said revenue for its fiscal third quarter ended Oct. 2 rose 1.8% to $611.4 million, although the company's quarterly loss widened to $4 million from a year earlier, due to costs associated with the July sale of the Arby's chain.

Burger King, which went private in a leveraged buyout last year by 3G Capital Management Inc., said revenue in the third quarter ended Sept. 30 rose 1.4% to $608 million, while net income fell 24% to $48 million.

Burger King also has been trying to emulate McDonald's lately by introducing oatmeal for breakfast and testing fruit smoothies in an effort to broaden its appeal. Mr. Piedra said the company is focusing on operations, menu innovation, brand image and marketing. In May, Burger King set a goal of remodeling 1,000 restaurants by the end of 2012.

McDonald's isn't likely to feel much change from any shift in ranking. But with Wendy's getting stronger, McDonald's could lose market share in certain parts of the business, such as breakfast.

"As the leader in the [fast food] industry, we remain focused on our customers and our business," a McDonald's spokeswoman said.

[abuck76]

I love ya man, but Red Meat will kill ya........... :12224

http://news.bbc.co.uk/2/hi/health/7959128.stm

[NYBuckeye96]

I rarely eat red meat. If I eat out at a fast food place, I usually get grilled chicken. My go-to at Wendy's is Grilled Chicken, chili, and side salad.

It takes the human body one week to digest one serving of red meat. Anything we eat over one serving of red meat per week contributes to build up in the colon, which leads to an increased risk of colon cancer.

[abuck76]

Yep.........Good to hear about you...............My heart attack woke me up .......I do not eat any four legged animal anymore, and only eat meat three times a week..................The average man has 5 lbs. of undigested meat in their colon when they die.............YUKK!!!.......... :12224

[ManitouDan]

got to be the chili ! I could eat a few times a week --- Don't care for the fancy 8 dollar chicken combo meals . cmon it's still fast food MD

[abuck76]

I used to be a wendys manager when I first got out of college.....The "meat" they use in the chhile is the burned hamburger pattys that have been on the grill to long and get hard and black......They put them in a plastic bucket under the grill until it gets filled, then chop it up for chile the next day......yummmmmmmmm...... :12224

[ManitouDan]

its really good , thanks for sharing the secret . as always you are a ray of sunshine MD

[abuck76]

Speaking the truth is the only way I know....... :122245 ............. :12224

[LICKING COUNTY FAN]

Wendy's is so high for fast food I find it strange they are moving up the chart.

The one here in the Lake is always slow.
I noticed this each time I drive by it.

[Runner]

I'm glad they didn't rate the fries. Since they switched to sea salt, the fries are terrible.

[LICKING COUNTY FAN]

I do like sea salt better but .99 for a bite of fries is a rip off.

[ManitouDan]

I noticed the value fry I purchased had about 8 french fries in it ---value for Wendy i guess

[abuck76]

Corporatocracy= Less for more.............. :12224

[noreply66]

Anything but Macs

[starbase_318]

I try to avoid all burger joints but will have a childhood favorite, big mac, once in a great while. An occasional trip to BWs and/or a steak joint is the extent of my supporting the greedy. I can purchase a couple pounds of lean ground beef for the price of a combo meal. There's nothing better than a fresh burger off the grill with all the fixin's.

[ManitouDan]

so all the good workers at Wendy's . BK and McD's deserve to be boycotted and everyone loses their job ?

[starbase_318]

So the "GOOD" christian is making unfounded inferences to posts. NICE!! Boycott?? I prefer to support the greedy at BWs and a local steak joint! Oh, I also support the greedy grocery store chains and the makers of fine spirits. I do try to support only those stores that aren't afraid to say Merry Christmas, during this time of year. Should I "BOYCOTT" those outlets too, or is that in keeping with being a PROPER christian? 8)

Seems like you should worry more about your 8 fries before they get cold!

[ManitouDan]

you are the one that said you avoided them, thats a boycott. There is a bunch of inferring going on. please skip the goody two shoes christian BS -- please , another worn out old poke at those that make an attempt to follow. "Good" christians " Proper " Christians just give it a rest. MD

[starbase_318]

I'll give nothing a rest. You started this holy art thou bull with me on another thread so live with the results. The POKE is solely for your consumption, since you like to pass judgement on folks. You can end it or keep it going. YOUR CALL!!

BTW, to help with your reading comp, I said I "TRY TO AVOID" not "AVOIDED"! Once again the message gets lost in the interpretation! 8)

[ManitouDan]

I'm holier than no one. got it ? I'm proclaiming it . On my best day I s u c k . As far as your " try to avoid " VS " avoided " I should have expected your failure. You specialize in it.