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Early Morning Success

In 2020 Wendy’s (WEN) launched its nationwide breakfast menu just before COVID-19 lockdowns took effect. Since that time, the fast-food chain has moved into third in terms of breakfast sales. Wendy’s now trails the leader McDonald’s (MCD) and Restaurant Brands International’s (QSR) Burger King.

Executives at Wendy’s say breakfast sales accounted for around 8% of US revenue in the fourth quarter of 2021. For the year as a whole, breakfast sales increased 25% from 2020. Wendy’s is predicting even bigger numbers this year, anticipating total breakfast revenues could grow an additional 20%.

Overcoming COVID-19

Prior to the outbreak of COVID-19, lunch and dinner traffic was declining at fast-food restaurants — largely because consumers were opting for home-cooked meals or healthier options. As a result, breakfast turned out to be the only meal where major chains were seeing growth. Even as the pandemic disrupted daily life, Wendy’s stayed the course on its breakfast game plan and is now seeing its strategy pay off.

The company’s drive-thru service meshed well with social-distancing efforts. Meanwhile, other restaurants cut back hours or menu items. What’s more, competitors didn’t spend as much on advertising to compete with Wendy’s breakfast. Instead, many conserved cash amid the uncertain environment.

Chasing Burger King and McDonald’s

Both Burger King and McDonald’s launched their breakfast menus in the 1970s, giving them almost a 50-year lead on Wendy’s. Analysts say Burger King has struggled in recent years, partly due to sluggish breakfast sales. Meanwhile, McDonald’s is well established as the early-morning leader, but Wendy’s says that could change.

One of Wendy’s newest menu items is the Hot Honey Chicken Biscuit, while its Breakfast Baconator is a top seller. For now, the brand Dave Thomas helped make famous has the breakfast bronze — but silver is within sight, even if the golden arches remain a lofty goal.

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