Fast-food restaurants are rapidly reengineering their menus in an effort to get sales going in the right direction. A number of headwinds have dealt blows to sales growth at McDonald’s Corporation (NYSE:MCD), The Wendy’s Co (NASDAQ:WEN), and Burger King Worldwide Inc (NYSE:BKW), including higher payroll taxes and the still-soft job market in the United States.
These fast-food purveyors have rolled out a slew of new items and are seeing varying levels of success. Which of these stocks has the smoothest path ahead of it?
New items coming soon to a restaurant near you
Fast-food companies such as this are scrambling to introduce new products and adjust pricing policies to accommodate rapidly changing consumer preferences.
Since the U.S. economy continues to improve at such a frustratingly slow pace, consumers are still keeping a lid on discretionary spending. When they purchase fast food, they’re increasingly selecting from the dollar menu. This has hurt fast-food chains, which reap much higher margins from combo meals.
To get in front of this, earlier this year The Wendy’s Co (NASDAQ:WEN) changed its low-price offerings to what it now calls its ‘Right Price Right Size’ menu. In addition, The Wendy’s Co (NASDAQ:WEN) introduced its Pretzel Bacon Cheeseburger, which has been a huge success.
This explains why The Wendy’s Co (NASDAQ:WEN) reported spectacular second-quarter results of 15% growth in adjusted earnings before interest, taxes, depreciation, and amortization.
For its part, industry juggernaut McDonald’s Corporation (NYSE:MCD) is trying several new items designed to pique consumer interest, particularly those weary of the same old burger offerings.
McDonald’s Corporation (NYSE:MCD) has aggressively branched out into coffee and other specialty drinks, which are higher-margin products helping boost profits. And, more recently, McDonald’s Corporation (NYSE:MCD) announced plans to introduce the new Mighty Wings, hoping to take a slice of the massive chicken consumption in the United States.
Americans consumed an average of 82 pounds of chicken per capita in 2012, and through its new Mighty Wings, in addition to its current Chicken McWraps and its already-successful Chicken McNuggets, you can see why McDonald’s Corporation (NYSE:MCD) is eager to take advantage of this trend.
Meanwhile, Burger King Worldwide Inc (NYSE:BKW) itself plans on rolling out new items for the fall, but there’s no denying it is playing catch up to its two more successful rivals. Consider that last year, The Wendy’s Co (NASDAQ:WEN) surpassed Burger King Worldwide Inc (NYSE:BKW) as the number-two U.S. fast-food chain.