Wendy's can't seem to get breakfast right.
"Bottom line, Wendy’s hasn’t found a way to make breakfast profitable," wrote Scott Hume at Burger Business, who cited Wendy's CEO Emil Brolick's presentation at the ICR Xchange Investor Conference this week.
Brolick said that Wendy's has taken a $14.6 million charge for scrapping breakfast equipment in restaurants where it wasn't working.
He also said that it's still going to serve breakfast at 375-400 locations, but Wendy's will not be expanding the test for now.
“Breakfast is not going to be a top priority in this next three-year period. Longer term we may well come back to that,” he said, adding that Wendy's will only continue to pursue breakfast once it figures out “a much more profitable way to approach that daypart opportunity.”
But going forward, Wendy's needs breakfast to succeed if it ever wants to go toe-to-toe with its biggest competitor.
For McDonald's, breakfast is its trump card. It dominates the segment so much that it's trying to transform midnight into the beginning of the morning with its "Breakfast After Midnight" test.
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