Wendy's reports weaker than expected sales


Image copyright Getty Images

Burger chain Wendy’s has reported lower than expected sales as more diners decided to cook at home.

Sales at stores open at least 15 months rose by 0.4%. Analysts had expected 1.9% growth.

Wendy’s struggles are indicative of broader problems in the fast food industry, which is fighting an image of being unhealthy as well as rising wages in some US cities.

McDonald’s, Dunkin’ Brands Group and Starbucks have all posted lower sales.

Wendy’s profit for the second quarter was $26.5m (£20.3m) down from $40.2m last year.

Total sales at Wendy’s restaurants fell 22% to $382.7m.

Lower food prices helped Wendy’s and other restaurants offset costs, but cheaper prices at the grocery store also encouraged more people to cook at home.

Wendy’s chief executive Todd Penegor said he remained confident.

“In the face of challenging industry conditions, we remain confident that Wendy’s can win in the [fast food restaurant] space”.

New competitors in the fast food market and a growing desire for healthy, more high-end options have caused problems for many in the industry.


Newer brands like burger chain Shake Shack and bakery chain Panera are offering what many customers see as more premium options.

Shake Shack reports earning after markets close on Wednesday.

Fast food restaurants are also feeling pressure from increases in the minimum wage which has been introduced in several US cities.

A growing number of chains are trying out new menu items and discounts to attract customers.

Wendy’s has been pushing its four items for $4 menu option, while McDonalds has brought in all-day breakfast and is apparently mulling over introducing more fresh ingredients. Burger King has introduced a new Hot Dog and Whopperito- a twist on their signature Whopper burger that is wrapped like a burrito.

Shares of Wendy’s were down nearly 8% in early trading on Wednesday.

Source link