Fresh from last month’s introduction of the premium Dave’s Hot ’n Juicy Cheeseburgers line, Wendy’s will add a mid-price line of cheeseburgers dubbed “The W” by year-end. Acknowledging that consumer spending continues to be sluggish, the new line will be priced at $2.99, below Dave’s $4-and-up prices, and above its My 99¢ Everyday Value Menu tier.
The W will combine two 2.25-oz. burger patties, making it larger than quarter-pound burgers in the market. Emil Brolick, who rejoined Wendy’s as CEO in September, said the company hopes consumers will trade up to the W from 99¢ value-meal items. The W cheeseburger appears to be the item Wendy’s tested this year in selected markets under the D.T. Doubles name.
Although the company previously announced it would unveil its upgraded “Gold Chicken” sandwiches by year-end, that now won’t happen until 2012’s Q1. Brolick says the chain is testing chicken products “that I don’t believe any one else could produce.”
Brolick described the tiered-pricing for burgers as an element in a brand positioning for Wendy’s that he called “A Cut Above.” This means developing products equal in quality to fast-casual challengers but at lower price points. That doesn’t mean Wendy’s is likening itself to Smashburger or other higher-price chains, Brolick says, but he says he sees a significant opportunity for higher-quality menu items such as Wendy’s fresh-meat burgers in the QSR category and that Wendy’s can customize those burgers more easily than other QSRs. “I’m confident it’s a position we can easily hold, that is defensible and profitable,” Brolick said.
Brolick told analysts that Wendy’s has paid to much attention to its drive-thru business at the expense of the dining room experience, and that is changing. More broadly, Wendy’s “went through a difficult period and lost clarity of vision.” The new focus on core product quality is meant to reverse that.
For the 2011 third quarter ended Oct. 2, 2011, Wendy’s reported that North America systemwide same-store sales increased 0.9%, with company-operated restaurants up 1.8% on increased transactions of 1.1% and an increased average check of 0.7%.