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
