Analyst: Wendy's breakfast attempt may be at risk

Analyst says Wendy's attempt to sell breakfast nationwide may be at risk

Associated Press

NEW YORK (AP) -- Wendy's breakfast offerings, a planned part of the burger chain's nationwide menu revamp, are leaving franchise owners hungry in test markets, an analyst said Friday.

KeyBanc Capital Markets analyst Christopher O'Cull said that his restaurant contacts have indicated that Wendy's isn't likely to expand the breakfast service across the country because of weak demand.

But Wendy's says consumers have given its breakfast products high ratings.

"We believe breakfast represents an important long-term opportunity, and we want our share of this business," company spokesman Bob Bertini said. "We continue to make refinements as part of our breakfast testing with the goal of providing consumers a unique morning meal experience."

The Dublin, Ohio-based company has said that it is in a "transition year," with a new management team focused on modernizing restaurants and introducing menu items that will lay the groundwork for future growth.

Looking to keep pace with rivals like McDonald's Corp. and Burger King Worldwide Inc., Wendy's Co. said in November that it would take the same approach to breakfast as it does to its other meals: offer higher-quality items than other fast-food chains.

The breakfast menu is being tested in various markets. O'Cull said that Wendy's franchises in Providence, R.I., started offering breakfast in May, but demand has been weak in the early mornings and some lunch sales have suffered.

He's also concerned about franchisees not being on board with the company's remodeling plans and recent 10-cent price increases he's noticed in the Dave's Hot 'N Juicy combo items.

He maintained an "Underweight" rating.

Shares of Wendy's shed 2 cents to close Friday at $4.45. They're down about 17 percent this year.

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