A lot of things are going right at The Wendy’s Company.A note out this morning from Barclays points to new CEO Emil Brolick, the spinoff of Arby’s, and positive sales momentum as reasons for an overweight rating.
Among the most exciting things at Wendy’s is — as it should be — the burger.
The fast food chain hadn’t remade its flagship burger since it first opened more than 40 years ago. Sure, it avoided introducing total flops (think: New Coke and Clear Pepsi), but after decades of the same, consumers got bored.
Enter Project Gold Hamburger. The two-year project took Wendy’s executives across the country for a large-scale burger taste-test, in which they sampled beefy delights and drew on their favourites to shape Wendy’s burgers into something better. Panels of ordinary folks also gave their two-cents — in the end, the chain polled more than 10,000 people about their hamburger preferences.
Eventually, the finer points got resolved (crinkled versus plain pickles, red or white onions) and Dave’s Hot ‘N Juicy was born. The burger, named for the chain’s late founder Dave Thomas, built on the restaurant’s signature square-patty foundation, adding a buttered bun, switching to whole-fat mayonnaise, and cutting the mustard. The only thing that stayed wholly the same? The ketchup.
For Wendy’s the debut of Dave’s Hot ‘N Juicy is a chance at brand rejuvenation. McDonald’s, which last year claimed a whopping 49.5 per cent of the fast-food market share, recently gave itself a new, hipper identity by adding in-store WiFi and fancy coffee drinks. Wendy’s last year clung to just a 12.8 per cent share, but aims to boost that with the introduction of its redone burger and an updated marketing campaign.
Since founder Thomas died a few years ago, the chain has struggled to find a face for its brand. But now, Wendy (yes, the real Wendy, Thomas’ daughter) has signed on to schlep the burgers in TV spots. Though she has been the face of the franchise since it began, she’s appearing in ads for the first time to tout the new burger and galvanize her namesake. The restaurant says the Wendy Thomas ads fit squarely with its existing “You Know When It’s Real” campaign.
Barclay’s predicted Wendy’s to rise above competing brands in coming quarters, listing 2011 as a transition year for the fast-food chain. After the new brand is firmly set and the updates are fully integrated, the firm predicts a turnaround and growth for Wendy’s.
Though rising foods costs and higher quality ingredients could bump the new burger’s price tag up by as much as $0.10 or $0.20, the financial services provider still envisions what the chain itself does: a bolstered presence in the fast-food market and an uptick in popularity.
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