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We learned today that Wendy’s company-operated July same-store sales improved sequentially to up 2.0% (up 3.4%, excluding the impact of 300 fewer restaurants serving breakfast compared to a year ago) from -1.2% in 2Q09 (up 0.6%, excluding the breakfast impact).  From the chart below, you can see that Wendy’s had been underperforming both MCD and BKC in the U.S. since about 2Q07.

 In the most recent quarters , Wendy’s has started to gain share from BKC as Wendy’s increased its value messaging at the same time BKC focused more heavily on its premium priced menu items.  MCD is scheduled to report its July comparable sales growth on Monday, but has said that it expects its U.S. segment to post a number that is similar to or better than June’s 1.8% result (see my post titled MCD – July Sales Preview for more details).  Assuming MCD reports about 2% same-store sales in the U.S., July will mark the first month since 1Q07 that Wendy’s matched MCD’s comparable sales growth level.  And, excluding the YOY breakfast impact, Wendy’s may have actually stolen market share from MCD in July.  

BKC does not report fiscal 4Q09 (calendar 2Q09) until August 25, but the chart below reflects my belief that BCK’s same-store sales growth continued to decline on a sequential basis in the quarter and in July.  BKC acknowledged that its focus on premium products has failed to drive traffic and has more recently increased its advertising around more value items, such as the $1 Whopper Junior.  TAST reported 2Q09 results earlier this week and its Burger King same-store sales growth (TAST is a franchisee of 314 U.S. Burger King restaurants) fell off a cliff during the quarter on a sequential basis, -4.7% versus +5.1% in 1Q09.  These less than favorable trends continued in July with comparable sales down about 5%.  Directionally, these TAST results do not bode well for BKC. 

QSR - Big 3 Market Share Shifts - big3