Salads are working wonders for Wendy’s
Published 9:00 pm Friday, July 9, 2004
COLUMBUS, Ohio – The burger wars aren’t being fought with hamburgers, but with salads.
Wendy’s is neck-and-neck with rival Burger King, poised to take over as the No. 2 restaurant chain behind McDonald’s, analysts said Friday.
But its burgers aren’t what put the company there. Analysts say the chain’s salads and atmosphere attract adult fast-food eaters, a market not covered by McDonald’s often kid-focused strategies.
Since introducing its Garden Sensations salads in 2002, Wendy’s sales have been catching up to Burger King more quickly. The chain offers six specialty salads, ranging from Taco Supremo to Mandarin Chicken. Burger King’s menu has just two – Fire-Grilled Garden and Caesar salads.
U.S. sales at Wendy’s hamburger stores last year were about $7.3 billion, while Miami-based Burger King’s had sales of about $7.9 billion during the same period, according to estimates by Technomic, a Chicago company that tracks food service industry trends.
But Peter Oakes, a restaurant analyst with Piper Jaffray, said his estimates showed Wendy’s and Burger King in a dead heat for 2003 sales – at $7.3 billion each.
Oakes predicted Wendy’s sales would exceed Burger King’s by about $200 million in 2004.
“It’s highly likely that Wendy’s will overtake Burger King in 2004,” agreed Bob Goldin, of Technomic.
According to Burger King’s Web site, it has 225 fewer stores now than it did in 2003, leaving it with 7,679. Meanwhile, Wendy’s has set a goal to expand further into New England and California, building its U.S. store base to 8,500 to 9,500 stores by 2015. The chain now has 5,761 U.S. stores.
Burger King recently reported its fifth straight month of increased sales for stores open more than a year, but Morningstar Inc. analyst Carl Sibilski said that’s still not encouraging.
“I highly doubt that this is a turnaround for them,” he said. “Their CEO has departed and they seemed confused over their marketing strategy. I don’t even know what they stand for anymore.”
Burger King chief executive Brad Blum left earlier this month over strategic differences with its board of directors. Before Blum left, Burger King had changed its marketing strategy for the fifth time since 2001.
Wendy’s has found success by promoting a mature atmosphere, Sibilski said. By emphasizing the late-night hours of its playground-free restaurants, the chain has attracted adult diners along with families.
Associated Press
Analysts say Wendy’s switchover to an emphasis on salads is paying off.
