Wendy's is poised to overtake Burger King as the number-two fast food chain. This is the first time there has been a change in the top three burger chains since McDonald's, Burger King and Wendy's began operating. McDonald's remains in firstplace.
It looks like Wendy's will pass Burger King in U.S. sales, trailing only industry king McDonald's. This is the first reordering of the burger triumvirate since Wendy's was founded in 1969.
Market research conducted for the Wall Street Journal by Technomic, Inc. found that consumers are expected to fork over more than $175 billion at fast-food restaurants in 2011. That's an increase of 3 percent from 2010. Wendy's U.S. same-store sales are forecast to rise 1.1 percent, while Burger King's U.S. and Canada same-store sales are expected to drop 3.9 percent.
Wendy's has managed to advance on Burger King without opening more restaurants. The number of its U.S. restaurants has remained flat, at about 5,800. This compares with Burger King's 7,200 U.S. stores. McDonald's is way above these two, with more U.S. restaurants than Wendy's and Burger King combined, and almost four times the U.S. system-wide sales than either.
Wendy's fortunes got a boost from investor Nelson Peltz's Triarc Cos. which bought the chain in 2008. Following this, Wendy's upgraded its menu, changed the lettuce in its salads and softened the edges of its trademark square burgers. It has also increased some of it prices.
Burger King, on the other hand, has been hurt in recent times by changes in management and ownership, a lack of menu savvy, and a continued focus on young adult customers.
Wendy's has been focusing on improving the entire dining experience. Shortly after being acquired by Triarc, the company embarked on an 18-month process of interviewing 10,000 consumers. Wendy's spokesman Denny Lynch says they tried to discover exactly what the public wanted.
"They told us they liked the idea of fresh foods with as little processing as possible and ingredients they were familiar with."
Lynch says after the customer survey they reinvented their core menu.. The traditional iceberg lettuce topped with tomatoes and onions was dumped for four brand new salads featuring 11 different greens and toppings like apples, pecans and asiago cheese. Wendy's then focused on French fries, switching from a mixture of potato variety to only Russet potatoes, sliced with the skin still on, and sprinkled with sea salt.
And what would they do with the square burgers? Time Moneyland reports that Wendy's worried that their square burgers were a highly visible, distinguishing feature setting the chain apart from its competitors, so switching to an entirely round burger was out of the question. Wendy’s test kitchen came up with what the company calls a “natural square,” a thicker patty with slightly uneven edges that give the burger a hand-shaped feel. They also switched to a looser grind of beef to make the burgers thicker and juicier. In fact during the surveys, customers had told them the square ones looked as though they'd been processed, even though they were fresh.
And the new burgers are apparently a big hit. Andrew Ofisher, a 24-year-old software engineer, ate at a Wendy's in downtown Chicago last week and tried the new burger.
"This was more like a normal burger, not like a fast food burger. There was actually a pink part to it; it wasn't burned to a crisp."
Tim Perry, a 30-year-old product manager likes Burger King's spicy chicken sandwich, but has started going to Wendy's more often,
"It's good, it's fresh and you've got the sea salt fries."
Part of Burger King's issue is that is has been trying to copy McDonald's lately by introducing oatmeal for breakfast and testing fruit smoothies to try to compete. Burger King spokesman Miguel Piedra says the company is keeping its eye on operations, menu innovation, brand image and marketing. In May, Burger King set the goal of remodeling 1,000 of its restaurants by the end of 2012.