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WEN commentary on the QSR space:

  • Discounting remains as strong as ever.  While BKC has stepped back on its bacon double cheeseburger promotion, the overall discounting environment remains as aggressive as WEN has seen
  • There is much breakfast market share to be gained by more established brands (given the recent launch of MCD’s breakfast dollar menu, I find it hard to believe breakfast share will be gained easily by any of MCD’s competitors.  That being said, investment at breakfast will need to be justified)
  • The current marketing environment is the most difficult WEN management has faced at any point
  • Commodity prices will be higher in the second half of the year (this will make it increasingly more difficult for the industry to afford to discount)
  • Companies that capitalize and “play offense”, in these chaotic times, will reap future benefits
  • Unemployment remains a significant headwind for Wendy’s (and obviously, the industry in general)
  • Consumer confidence, while not as low as in early ‘09, is far from encouraging