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Wendy’s new breakfast proves popular as McDonalds struggles

Wendy’s new breakfast menu is already making up eight per cent of its sales, despite the coronavirus pandemic cutting into morning business because of mandated lockdowns.

The new breakfast menu was launched on March 2, two weeks before coronavirus-mandated lockdowns ended the morning commute for many Americans.  

The lineup includes a morning version of its Baconator sandwich and a Frosty-ccino coffee drink.

But while rivals McDonald’s, Dunkin and Starbucks have reported struggles with morning sales, Wendy’s have been quick to trumpet the success of their new menu.

 

 Analysts say Wendy’s choice of going with non-traditional items for its breakfast menu played into the chain’s favor against the impacts of the virus.

‘With not much else to do, some consumers welcome the opportunity to try a fun new menu item during this crisis,’ Mintel food service analyst Jill Failla said. 

‘This trial gives them something to talk about with family, friends and on social media,’ Failla told CNN. 

Falla told CNN those were ‘relevant menu trends’, with appeal to younger people. 

Wendy’s, reporting on its success Monday, said it was banking for breakfast to account for as much as 10 per cent by the end of the year. 

‘We could not be more pleased with our breakfast daypart since its launch in early March,’ Wendy’s CEO Todd Penegor said in an earnings call.  ‘Interest in breakfast hasn’t faded.’ 

Shares of Wendy’s stock were just under $22 in mid-day trading on Monday. 

Meanwhile, rivals like McDonald’s, which had to drop its popular all-day breakfast menu to save costs during the pandemic, reported a much bumpier ride during the second quarter.  

Chris Kempczinski CEO of the world’s largest fast food restaurant chain, said in an earnings call last month that breakfast ‘was one area of pressure’, primarily from new competitors in the morning, CNN reported. 

The chain in its latest earnings report announced that it will close 200 locations in the US after sales dropped by 30 per cent due to lockdowns limiting operations to drive-thru and delivery. 

In response, McDonald’s said it will delay dining room re-openings for at least another month and will spend heavily to convince people to come back, particularly for breakfast. 

Meanwhile, competitors Dunkin’ and Starbucks said they also have seen business drop in the mornings with fewer customers coming because of mandated COVID-19 lockdowns. 

Starbucks estimated that it lost $3.1 billion in revenue due to the coronavirus pandemic, CNBC. Despite the losses and the continued impacts of COVID-19, the chain planned to still open 130 new locations globally.

Kevin Johnson, the company’s CEO, described the lockdown’s impact on morning commutes as a ‘headwind’, CNN reported.

Meanwhile, Dunkin’ which also has struggled in the mornings, announced it will close 800 locations in the US permanently after suffering a 20 per cent loss in second quarter revenue. 

The losses again come as COVID-19 lockdowns meant fewer customers were stopping at Dunkin’ stores on their way to work.  

The Canton, Massachusetts,-based company said the closings will impact ‘low-volume sales’ stores that only represented about 2 per cent of US sales in 2019. 

Same-store sales still improved ‘sequentially throughout the quarter’ CEO Dave Hoffmann, said in a press release. He credited new menu items designed to appeal to customers who now frequent Dunkin’ stores later in the day’.  

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