How Wendy’s Beat Its Competitors In Fast Food Breakfast Sales

Wendy’s (WEN) got back into the breakfast wars in March, and it seems to be paying off for the burger chain.

The company reported a total revenue of $452.2 million for Q3 2020, up from $437.9 million in Q3 2019. The revenue boost was attributed to its new breakfast menu, which includes items such as the Breakfast Baconator as well as croissant and biscuit sandwiches.

Wendy’s said its breakfast menu alone contributed to 6.5% of its store restaurant sales for the quarter, with sales remaining strong for the menu at over 7% for the quarter.

The pandemic seems to be helping Wendy’s win customers over its rivals as the company said that consumers are changing the way they eat. As some dining rooms remain closed during the pandemic, consumers are gravitating towards delivery for meals, which Wendy’s said also helped accelerate its growth.

To reach the gain in sales for its breakfast business, Wendy’s has dumped a slew of marketing dollars into promoting its breakfast menu, competing hard against rivals McDonald’s and Burger King.

For the quarter, the company spent $6.2 million on advertising the breakfast offering – a significant increase over the $2.2 million it spent in Q2 2020.

An additional boost was provided by Taco Bell’s limited menu, which eliminated breakfast during the pandemic.

CEO Todd Penegor told analysts during an earnings call (via CNBC) on Wednesday that Wendy’s repeat customer business remains “very strong,” referring to its Frosty-ccino and Breakfast Baconator menu items that have changed consumers’ breakfast habits.

Wendy’s said it would “continue to drive awareness” about its breakfast menu “through our incremental marketing spending.” The restaurant chain also said that it is seeing high awareness for its breakfast items as high as 50%.

“We remain focused on our goal of delivering efficient, accelerated growth behind our three major long-term growth pillars: building our breakfast daypart, growing our digital business, and expanding our International footprint,” Penegor said.

“With the momentum we have in our business, I am more confident than ever that we will achieve our vision of becoming the world's most thriving and beloved restaurant brand,” he added.

Shares of Wendy's were trading at $22.21 as of 1:27 p.m. EST, down 93 cents of 4.02%.