The Wendy’s Co (WEN): What Happened?

McDonald’s Corporation (NYSE:MCD) will give the U.S. its maximum attention, owing to the fact that both in Europe and Asia, the same-store sales trends are negative. Europe is down 2.4% in April on account of the general economic situation and Asia/Pacific, Middle East and Africa is down 2.9% on account of the avian flu epidemic in China.

The company has openly announced that it will sacrifice its margins willingly in the U.S. in order to increase market share. And so far it has been successful in doing just that.

Burger King is leaving no stone unturned

Burger King Worldwide Inc (NYSE:BKW) has also woken up to the fact it needs to promote its value items more. What has resulted is heightened promotion around the company’s dollar menu.

This has already made an impact on the sales trends. Although first-quarter same store sales declined 3% in the US and Canada, March sales were much better following the value promotion and the same trends continued in April.

Burger King Worldwide Inc (NYSE:BKW) is trying different avenues for its value campaigns. In addition to putting the Jr Whopper sandwich on the value menu at $1.29, the company is also trying out a daily discount program in some test markets in the U.S. It is offering one combo meal on all weekdays at a promotional price of $4.99.

Wendy’s biggest bet

The Wendy’s Co (NASDAQ:WEN) is spending heavily on modernization. While McDonald’s and Burger King are also focused on renovation of their stores, Wendy’s is being the most aggressive in this front. It is getting Wi-Fi, flat-screened televisions, high-quality seating arrangements and even fireplaces. The idea is to differentiate itself from McDonald’s and Burger King and provide more ambient and up-market restaurant environment.

It will be interesting to see what the comps look like when the company starts getting the benefits of its remodeling together with its value promotions.

Summing up

The Wendy’s Co (NASDAQ:WEN) is trying to create a niche for itself by providing better quality food and better eating-out experience. However, it has so far ignored its value menu, which been a major driving force in the QSR segment. With NPD predicting a 1% decline in 2013 in fast-food sector traffic, the market conditions are looking to test even the biggest players. It is time that Wendy’s got its act together in the value arena.

The article Where Did Wendy’s Fall Short? originally appeared on Fool.com and is written by Eshna De.

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