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Wendy’s Looks to the Future

Filed under Business, LTO, Pricing

Embarking on what CEO Emil Brolick called a “holistic, highly integrated brand transformation,” Wendy’s has begun a three-year plan intended to extensively remodel its stores, image and menu. This week’s adoption of an updated logoand new packaging and crew uniforms is one element.

The Right Price, Right Size Menu is the primary value product.

Wendy’s released audited results, including a -0.2% decline in same-store sales for Q4 and a 1.6% increase for full-year 2012. The quarter was hurt by the Mozzarella Chicken Supreme LTO in November, which “did not resonate with consumers as strongly as we hoped,” Brolick said. But he said the company is “very pleased” with initial response to the Right Price, Right Size value menu introduced in January. That menu—which freed Wendy’s and its franchisees from the previous 99¢ price point—will be the “dominant focus” of the chain’s value marketing, Brolick said. The new menu provides higher margins.

But Wendy’s won’t shy away from premium-price menu items. It will introduce its latest menu addition in late March, expected to be the Grilled Chicken Flatbread sandwich line it has been testing over the past year. Brolick ducked a question about a Flatbreads introduction during this morning’s earnings call.

Brolick said Wendy’s expects to have “image activated” (i.e. remodeled) 301 domestic restaurants by the end of this year. By the close of 2015, 1,331 of its 6,100 North American stores will have been updated under the three-year plan. This year, the chain expects to close more stores than the company and franchisees will open.