The fast-food chain keeps innovating, but making changes comes with a price.
The fast-food game now centers on innovation. Instead of offering stable menu that’s always the same no matter where you eat it — a model McDonald’s (MCD) – Get McDonald’s Corporation Report made famous — fast-food chains now have to endless rotate in new limited-time-offers (LTOs) to keep people excited.
Yes, some people just want a Big Mac and some fries, but in a hyper competitive markets, chains generally need something to bring in a crowd beyond their regulars. That’s an area where Yum! Brands (YUM) – Get Yum! Brands Inc. Report Taco Bell and KFC have been market leaders. Those chains have given us two different variations for fried chicken substitutes for a bun/taco.
McDonald’s and other burger chains have definitely used LTOs, but they pick their spots more than Taco Bell and KFC. The creator of the Big Mac has actually leaned into its “secret menu” by putting some customer favorite hacks on the actual menu. And, McDonald’s has also had its celebrity meals (hello BTS Army) which either entirely consist of existing menu items or mostly do with a new sauce or something minor added.
Wendy’s (WEN) – Get Wendy’s Company (The) Report falls somewhere in the middle when it comes to innovation. The chain has added some new permanent menu items like its Baconator and Breakfast Baconator. It has also tried some LTOs like its Hot Honey Chicken Biscuit. now, the chain has a new limited-time offer that’s proving very popular, but it’s being sold at the expense of another beloved favorite being taken off the menu.
Wendy’s Gives and Takes Away a Frosty
Wendy’s first introduced the Frosty — a sort of thick shake or thin ice cream treat — in 1969. It came in one flavor, chocolate, until 2006. Adding another flavor meant adding a second Frosty machine as each one can only make one flavor at a time and requires a thorough cleaning before another one can be made.
Now, Wendy’s has added a Strawberry Frosty for the summer, but selling that means that the Vanilla Frosty has to be taken off the menu. And while Wendy’s has been teased over the years for the in-between consistency of its frozen treat, the chain was quick to poke fun at McDonald’s famously-broken McFlurry machines.
“We’re always listening to our fans and as the most-requested item, it was a no-brainer for us to bring the Strawberry Frosty to the menu this season,” said Chief Marketing Officer Carl Loredo in a press release. “While some of our competitors are still trying to get their ice cream machines to work, fans can dip into this new strawberry treat all summer long at Wendy’s.”
The problem is that while Strawberry will certainly bring in new customers, fans who love vanilla will be left out in the cold.
Wendy’s has Produced Strong Results
Wendy’s hovers between pushing value and pushing quality, as it offer both $4 and $5 meal deals while it also advertises having fresh, never frozen beef. CEO Todd Penegor talked about both value and menu innovation during the chain’s first-quarter earnings call.
“[We] continue to work to make sure that we have a 4 for $4 offering out there, trade folks up into the $5 Biggie Bag, which is compelling value, do the things that we need to do on the innovation front to continue to keep our menu fresh and on the top of mind for consumers to come in and even drive things like the buck biscuit trial promotion that was in the market to start the year to make sure that we can continue to have our customers act, bring them in, make sure that we’re focused not only on driving dollar sales, but driving traffic,” he said.
That has been a successful model, according to the CEO.
“And what we’re really pleased within Q1 with all of that backdrop, is we did again gain dollar share in the first quarter. So we’re now 11 consecutive quarters of holding or gaining dollar share,” he added.