- For Wendy’s, Cheerios is now as much of a rival for breakfast customers as other restaurants, its CMO says.
- Remote work means that fewer customers are getting breakfast on-the-go.
- But breakfast sales are still booming for Wendy’s. It just reported record quarterly breakfast sales.
The rise in remote working means that for Wendy’s, Cheerios is now as much of a rival for breakfast customers as other quick-service restaurants, its CMO says.
Breakfast sales at QSRs and fast-food chains took a massive hit during the pandemic as people worked from home and stopped buying coffees, pastries, and egg sandwiches on their way to the office. Wendy’s was one of the few chains that fared well.
Sales have since rebounded massively as the economy reopened, but many people still work remotely at least part of the time.
“We’re competing with Cheerios as much as we’re competing with the next QSRs these days,” Carl Loredo, Wendy’s global CMO, told Insider on Monday.
“That’s something that we have to work through given that the overall consumer cycle related to breakfast has fallen back, but we’re seeing at least in the US a lot more folks getting back out in the road in the mornings and seeing that traffic pick up,” he added.
Executives from other QSR brands have similarly said that remote work is continuing to affect breakfast sales. Josh Kobza, the CEO of Tim Hortons’ parent company, told investors last week that traffic at the chain was still “a little bit lower” than pre-pandemic, including in the morning, “and I think a lot of that’s driven by changes in patterns of working from home.”
Wendy’s has invested heavily in marketing its breakfast menu, which it revamped shortly before lockdown hit. The chain reported record quarterly US breakfast sales volumes in the quarter to July 2, with year-over-year sales growth in the mid-single digits.
And Wendy’s is eyeing “outsized” growth for its breakfast sales in the future, executives said at its earnings call last week.
It recently launched a Frosty cream cold brew and is adding other breakfast items, CEO Todd Penegor told investors. Wendy’s will also carry out with “more consistent” promotional activity so that customers try its breakfast offerings and then return for more, he said.
“We’re still working to ingrain the habit and really drive the frequency and the repeat on that breakfast daypart,” Penegor said.
“We’ve still got a majority of our customers that have tried us at lunch or dinner that have not yet tried us for breakfast,” he noted.
Wendy’s breakfast menu includes French toast sticks, sandwiches in croissant and biscuit buns, and hot and iced coffee.
At Wendy’s previous earnings call, in May, Penegor said that Wendy’s delivered its fastest service for breakfast orders “but I do think we got to sprinkle in a little more value.”
“There’s a core consumer that’s only going to come to breakfast in QSR if there’s a product on deals, so we’re going to have to continue to make sure we’re competitive on that front,” Penegor continued.
“And we got to continue to make sure that we got a more complete beverage business,” he added, noting that a lot of the recent growth in breakfast sales was from businesses with big drinks offerings.
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