Wendy's continues to bite at McDonald's lead
The smaller chain is seeing much stronger sales momentum than the market leader.
Wendy's (WEN) may describe itself as "the world's third-largest quick-service hamburger company," but the Dublin, Ohio, company has been growing and nibbling away at the market share of fast-food giant McDonald's (MCD).
According to the restaurant industry website QSR, 2013 saw a major evolution in the menus at many fast-food chains.
Economic pressures and changing consumer demands have forced a lot of dollar menus to make way for multi-priced value meals, as well as the higher-priced customer favorites.
"It was inevitable that stratification was going to happen," Dennis Lombardi, executive vice president of foodservice strategies at WD Partners, an Ohio design and consulting company, told the website. "It was like trying to keep gasoline at $1."
Both Wendy's and McDonald's changed to multi-priced "value" menus last year. And Wendy's executives credited their better-than-expected third quarter results in November to the success of their Pretzel Bacon Cheeseburger and other recently introduced premium items.
"Our third-quarter two-year Company-operated same-store sales increase of 5.9 percent was our strongest comp growth since 2005, driven by the highly successful Pretzel Bacon Cheeseburger promotion," Wendy's President and CEO Emil Brolick said at the time.
"We have also seen a solid response to our October Pretzel Pub Chicken sandwich promotion," he added, "and our third-quarter results give us the confidence to raise our 2013 Adjusted EBITDA outlook to approximately $365 million."
As for McDonald's, while its title of world's largest restaurant chain by revenue is unlikely to be challenged for some time (if ever), it's been struggling in its home market.
The company reported its November same-store sales were down 0.8 percent in the U.S. and down 2.3 percent in its Asia/Pacific, Middle Eastern and African markets. European same-store sales, however, were up nearly two percent.
In a video interview for The Wall Street Journal's MoneyBeat blog, reporter Sara Murray pointed out McDonald's launched several new products in 2013, including Fish McBites, Mighty Wings and Egg White Delight McMuffins -- many of which didn't go down well with its customers.
"The products they rolled out ended up actually making service slower," she noted, "because there were so many new products, and none of them really excited customers."
And while she doesn't think the position of McDonald's President and CEO Don Thompson is in jeopardy, she said, the company is surely "going to be pushing him to come up with a hot product that really gets people excited."
Read more from Benzinga
I'm 67 years old, and over my years I've eaten a lot of McDonalds and remember when Wendy's started up? Wendy's had a square burger served bare, then you took it to the 'fix it the way you like it' salad bar. The Wendy's burgers were better then, but lost ground when they became 'just another' fast-food place? McDonalds? Used to have those long fries fried in beef fat. Today, they are all different sizes, and just average in taste.
I can make a better burger at home. Fries? The oven-baked fries are just as good. And the whole meal is a whole lot cheaper, and takes about the same time to fix as going to a fast-food joint, then going home.
I prefer Wendy's. I don't want my bun to be full of that "secret sauce". It drowns out the taste of the burger. If I wanted it like McD's, I'd just as soon carry a jar of mayo around with me and eat a palmful whenever the mood struck.
what do you expect.....mcdonalds value meals are around $7 and you poor quality of food. they are the walmart of fast food.
I like that Wendy's introduces new menu items regularly. if they work, they work. If not, they try something else. I'm more apt to go there if I can try new stuff like the pretzel bacon cheeseburger. That was good. Also, I like Wendy's fries better than McDonalds. Wendys' fries are soggy less often.
If mcdonalds would serve their breakfast menu all day long, I'd eat there more often.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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