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Wendy’s Blaming Weak Sales Growth On Cheap Groceries That Keep People At Home

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When you’re a national fast food chain, you can’t just sit back and coast — you’ve got to constantly increase sales to show you’re growing. Wendy’s is the latest chain to report weaker-than-expected sales growth, results the company is blaming on the fact that groceries are cheap, meaning more people are eating at home.

Wendy’s said on Wednesday (try saying that three times fast) that sales rose 0.4% at North American restaurants that have been open at least 15 months in the second quarter, a sharp contrast to a predicted 2.4% increase, The New York Times reports.

During a conference call reported by the NYT, Wendy’s CEO Todd Penegor said customer traffic has been slipping since earlier this year at many fast food restaurants, because commodity costs have kept grocery prices down, while chains might keep prices the same or raise them, depending on operating costs and changing profit margins.

When asked by analysts whether Wendy’s had some numbers to back up the assertion that folks are staying home to cook instead of going out, or if executives were just relying on a gut feeling, Penegor said it was “some gut, and some science.” Translation: restaurants aren’t exactly clear what’s going on.

Despite that, Penegor says he thinks fast food chains will keep wooing customers away from sit-down restaurants.

“We view this as a bump in the road,” he said.

Wendy’s Says Cheaper Groceries Keeping People at Home [The New York Times]


by Mary Beth Quirk via Consumerist

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