Wendy’s hamburger chain saw sales fall short of expectations as more consumers decided to eat at home.
Sales in stores that have been open for at least 15 months increased by 0.4%. Analysts expected a 1.9% growth.
The drop in food prices helped Wendy cut costs, but cheaper food also encouraged more people to cook.
Second-quarter earnings decreased $ 13.7 million year-over-year to $ 26.5 million.
Total sales at Wendy’s restaurants decreased by 22% to $ 382.7 million.
Todd Penegor, CEO of Channel, said: “The most notable factor in the sales slowdown appears to be the continuing difference between the cost of eating at home and the cost of eating outdoors, which is now in full swing since the recession. ”
Wendy’s slump in sales reflects more general fast-food issues that consumers increasingly perceive as unhealthy.
McDonald’s, Dunkin ‘Donuts, and Starbucks have reported weaker sales in recent quarters.
“Fast Casual” competition
New competitors in the fast-food market and consumers’ growing desire for healthier options have also caused problems for many in the industry.
As people eat out, more and more “casual and fast” chains become another luxurious experience.
Euromonitor consumer goods analyst Stephen Dutton said: “Consumers have slightly higher disposable income and are ready to switch to a premium option that has increased demand for new players like Shake Shack and Chipotle.”
Newcomers like Shake Shack and the Panera bakery chain offer what many customers think is a better option despite higher prices.
TalktoWendys Survey Guide
To participate in the TalktoWendys Survey, you need to follow a set of simple steps. Have a look at them below:
- To begin with, visit the official TalktoWendys survey portal at www.TalktoWendys.com.
- Now, enter some personal information like the date and time, store number you visited, the survey code, etc.
- After you submit the details correctly, you will be displayed a survey questionnaire. Here, you will be displayed a list of questions based on your last visit to Wendy’s.
- Kindly answer each and every answer of the TalktoWendys Survey honestly.
- After you answer all the questions, you will be asked to submit the validation code. You need to redeem this code on your next visit to Wendy’s.
- It is necessary to know that you can claim the TalktoWendys rewards only after you answer each and every question of the TalktoWendys.
Shake Shack announced Wednesday that its similar quarterly sales would increase 4.5%, but total sales would increase 37% to $ 66.5 million. Profits increased from $ 2.2 million to $ 3.3 million.
The stock fell 9% to $ 40.87 outside business hours and fell nearly 43% in the past 12 months. Shake Shack was trading at $ 21 a share in January 2015 and briefly raised $ 100 in May last year.
Fast food restaurants are also feeling the pressure of the minimum wage increase that is being introduced in several cities in the United States.
More and more chains are trying new menu items and discounts to attract customers.
Wendy’s has taken the “Four for $ 4” menu option, while McDonald’s brought breakfast all day and can introduce more fresh ingredients.
Burger King is now selling hot dogs in the United States and next week there will be Whopperito, a variant of the Whopper burger that wraps like a burrito.
According to Mr. Dutton, you can add new offers and create brand awareness. However, he cautions that some consumers are looking for a better overall dining experience that can be expensive to introduce.
There are two ways to deal with new players, Dutton said. McDonald’s tries to compete directly with them by improving business, but they risk alienating a consumer base that wants low prices.
But there are chains that replicate valuable products by offering limited-time promotions and mashups of different foods.