Wendy’s is asking its operators to invest between $13,000 and $23,000 per store in the next months in preparation for this fall’s planned national rollout of the Dave’s Hot ‘n Juicy Cheeseburger that it has been testing since November. CEO Roland Smith said the investment will be needed to cover equipment such as a bun toaster and grill enhancements.
The Dave’s burger, named for late founder Dave Thomas, is 40% thicker and has crinkle-cut pickles and a butter-toasted bun. Smith told analysts today that in five markets where the premium-price burger is testing, customer traffic and per-store sales numbers have risen. Test marketing advertising from Kaplan Thaler Group featured Wendy Thomas, Dave’s daughter. The chain did not say if these spots will support the national rollout.
Operators also will be asked to invest in new kitchen equipment, including for its new Premium Blend Coffee program and menu boards to accommodate the breakfast program that rolls out next year. In a few locations, Wendy’s is grinding coffee beans in-store but hasn’t decided if that will be standard. The return on breakfast investments is expected to yield increases of $140,000 to $150,000 above the current $1.4 million average unit volume.
Smith also hinted at the possibility that Wendy’s might offer burgers for breakfast, saying the chain has learned from the breakfast tests that there is demand for burgers “as early as 8 or 9 a.m.”
Other menu plans include a new chicken salad this spring that will include blueberries, strawberries, Asiago cheese and trendy acai berry dressing. Wendy’s share of the QSR salads category is now above 16%, besting Panera Bread and McDonald’s, Smith said. A program to revamp chicken sandwiches also is ongoing. He added that Wendy’s increased its share of QSR value-meal traffic in Q4 by 1.6% with its “My 99¢” campaign.
Wendy’s/Arby’s Group CFO Steve Hare said the company is “nervous” about the commodity price increases it is seeing but doesn’t anticipate major price changes. The company selectively increased prices slightly in late 2010.
Smith reiterated the company’s intention to seek a buyer for the Arby’s brand, which saw same-store sales decline by 5.8% in 2010. Margins dipped to 11.6% from 13.4% for the year. Arby’s has been dressed up for sale with a “Good Mood Food” advertising campaign, the first from new agency BBDO, New York.