Wendy's will likely expand its "value menu" in the coming year, adding a slate of items priced at just 99 cents in a bid to compete with McDonald's for customers looking for inexpensive fast food, the Wall Street Journal's Annie Gasparro reports. The company's chief financial officer made the announcement in a call to investors, explaining that the chain's executives hoped the move would increase store traffic, which he described as "flat to slightly down" over the past year.
The announcement was a striking reversal from Wendy's policy as recently as spring 2012. In March, OC Register fast food savant Nancy Luna reported that the CEO of Wendy's had announced plans to cut items from the value menu as part of a broader menu reform that emphasized higher-margin premium options. Changes in the food offerings at the country's second-biggest burger chain were themselves just one facet of a planned shift toward what new Wendy's CMO Craig Bahner has described as a "fast casual experience at quick service prices."
Elements of this shift have already been successful. A new restaurant design has boosted sales at the few locations in which it's been implemented, consumers have responded enthusiastically to new higher-end burgers and new salads have made Wendy's the number one seller of salads among restaurant chains in the country, according to NPD Group data.
Yet all these improvements seem not to have done much to help Wendy's bottom line -- or, just as important at a publicly-traded company, its stock price. McDonald's, on the other hand, seems to be turning things around after a brief rough patch, largely by emphasizing its dollar menu. Hence Wendy's desire to follow suit.
Gasparo writes that, "Wendy's would like about 15% of its business to come from value-menu items" once the chain adds the new 99-cent items to its menu.