Which fast food joint do you visit most?
For me, it’s a toss up between McDonalds for the Dollar Menu and Arby’s for their Diet Mt Dew.
Next is Wendy’s, although I was tempted last week on Whopper Wednesday to visit Burger King.
Mediapost updates us on the burger wars:
What Wendy’s Has Done To (Nearly) Overtake BK
Just as it has been steadily, almost stealthily, gaining share over the years, the news about Wendy’s imminent overtaking of Burger King as the No. 2 burger and fries purveyor is trickling outin the mainstream media.
This week, Financial Times, the Wall Street Journal and Time, among others, all carried stories that expanded on news that Karlene Lukovitz first brought to Marketing Daily readers on Dec. 1.
It all stems from a comment by Janney Capital Markets analyst Mark Kalinowski on Nov. 29: “We expect Wendy’s to overtake privately held Burger King for the No. 2 market share position within the limited service hamburger sector, perhaps as soon as this year.”
Nation’s Restaurant News’ Mark Brandau, who also jumped on the analyst’s report (Nov. 30), pointed out that “Kalinowski’s bullish projections for Wendy’s factored in same-store sales momentum and followed a visit to a new Wendy’s prototype in Phoenix,” which features the chain’s new “urban” design. NRN provides a slide-show peek at one prototype store in Phoenix. Wendy’s is testing four different prototypes in five markets, it reports, including new designs in Ontario, Canada, and Columbus, Ohio.
The Phoenix store is also a test location for Wendy’s Redhead Roasters line of premium coffee and it has a breakfast menu with new baked goods. Kalinowski suggests that both will boost same store sales over the coming years, as might the two Coca-Cola Freestyle machines with a touch-screen interface that can pour more than 100 soft drink flavors.
But what has gotten Wendy’s to this position in the … er, almost-second place?
Burger King’s gaffes for one. The Financial Times’ Alan Rappeport and David Gelles observe that for year it has “staked its fortunes on male-centric advertising filled with sexual innuendo,” and suggest that such a strategy left an opening for Wendy’s.
“We view the Burger King brand as troubled –- a brand that needs to find its voice in the domestic market,” Kalinowski writes. “To us, flame-broiling and ‘Have it your way’ are not nearly enough to connect with many of today’s sophisticated burger-sector consumers.” (See Lukovitz’ story for more on BK’s own “major makeover.”)
But there’s more to it than Burger King’s mistakes, as Julie Jargon makes clear in the Wall Street Journal. It all started when Nelson Peltz’s Triarc Cos. bought the chain in 2008.
“Much the way McDonald’s has broadened its menu and remodeled its restaurants, Wendy’s has upgraded its menu, changing the lettuce in its salads and softening the edges of its trademark square burgers. It has also raised some prices,” Jargon writes.
Over an 18-month period, Wendy’s interviewed about 10,000 consumers, which led to the “reinvention of our core menu,” Wendy’s spokesman Denny Lynch tells Jargon. “They told us they liked the idea of fresh foods with as little processing as possible and ingredients they were familiar with,” Lynch says.
Four new salad varieties with 11 different greens and ingredients such apples, pecans and asiago cheese replaced the iceberg lettuce; French fries were transformed from mutts to purebred Russets with their skins on and have been gussied up with sea salt.
Time “Moneyland” blogger Martha C. White points to a more recent menu innovation -– “subtle rounding of its signature square patties” — as another key factor. Evidently, discriminating customers perceived the square as indicative of a heavily processed slab of beef.
“But those square burgers are a highly visible, distinguishing feature that sets the chain apart from its competitors,” White writes. “Switching to an entirely round burger was out of the question. So Wendy’s test kitchen came up with what the company calls a ‘natural square,’ a thicker patty with slightly uneven edges that give the burger a hand-shaped feel.”
This is not the first time Wendy’s has snuck up on BK, as “burgerboy” writes in a comment to Brandau’s story, “but the vagaries of fast food interfered and Wendy’s entered a down period.”
ABC News’ Matthew Rosenbaum reports that, according to Technomic, Burger King held a 13.3% market share in 2010 while Wendy’s had 12.8% percent share. “If Wendy’s does surpass Burger King, it would be a first for the chain,” Rosenbaum writes, but when asked to comment on the development, a representative told ABC News that the company was “focused on its business.”
Which means, it appears, its customers.