Wendy's sales climb amid transformation push

Associated Press Modified: November 8, 2012 at 4:15 pm •  Published: November 8, 2012
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NEW YORK (AP) — Wendy's push to remake itself as a higher-end hamburger chain is starting to pay off, with a key sales figure rising for the sixth straight quarter.

The company, based in Dublin, Ohio, is trying to pull away from the image of the typical fast-food chain and cast itself as a purveyor of higher-quality burgers and sides. The move reflects the growing popularity of chains such as Chipotle and Panera, which offer better quality food for slightly higher prices.

Other chains have been taking cues from the new breed of fast-casual restaurants as well, with Burger King reworking its menu and Taco Bell rolling out its higher-end Cantina Bell bowls and burritos earlier this year. McDonald's Corp., meanwhile, said it plans to intensify its focus on value in the challenging economy. The Oak Brook, Ill.-based chain said Thursday that sales in October fell for the first time since 2003.

In the latest quarter, Wendy's said premium food offerings — such as the Son of Baconator and the Asiago Ranch chicken sandwich — helped lift revenue by 2.7 percent at restaurants open at least 15 months. That marks the sixth straight quarter that figure has climbed. The figure is a good gauge of a restaurant chain's health because it strips out the volatility of newly opened and closed stores. Wendy's said the increase was driven by greater spending per visit, although the number of transactions declined.

The improvement helped Wendy's shares rise 13 cents, or 3 percent, to close at $4.39.

CEO Emil Brolick said in a conference call with analysts that Wendy's can keep improving the image of its food without paying that much more for ingredients. For example, Wendy's is considering different bread options such as wheat or focaccia buns for its burgers and sandwiches. Even though these wouldn't cost Wendy's much more, Brolick has said customers equate them with better quality and are willing to pay more for them.

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