Posted on 05/11/2023 8:32:41 AM PDT by grimalkin
Wendy's (WEN) is gaining higher-income consumers even while inflation continues to plague the restaurant business.
"The good news is we're seeing nice growth with the over $75,000 cohort, and we continue to hold nice share there," CEO Todd Allan Penegor said on a call with investors after Q1 2023 earnings were announced on Wednesday. The under-$75,000 consumers? The company, he said, has "maintained our share, but traffic is relatively flattish there."
In Q1 U.S. same-store sales increased by 7.2% boosted by "continued" higher prices and year-over-year customer count growth in each month of the quarter. The food chain increased prices for the year by about 7%, higher than about 6% in the previous quarter.
CFO Gunther Plosch said the brand isn't really seeing pushback to the higher prices, saying the "proof is in the pudding." He added: "Remember, pricing, the carryover is about 5%...so, the new pricing action is not a lot and again, I think the proof is in the pudding here. We have not seen major resistance from customers on the pricing actions we have taken, as evidenced by the traffic growth that we have seen in the first quarter and maintaining and holding our dollar and traffic share in the category."
(Excerpt) Read more at finance.yahoo.com ...
Indeed.
Do they take EBT cards?
High end luxury restaurants like Wendy’s will thrive in this economy.
Wendy’s is smart with their menu choices. For the blue collar crowd, they’ve got the Baconator, while for the white collar crowd, they’ve got the Bourbon Bacon Cheeseburger. Just change a couple ingredients and you’ve got a sandwich tailored to a whole different demographic, and it can’t really cost them much to have a different sauce, different bun, and some crunchy onions or differently sliced pickles on hand.
Just how do they know the income cohort of their customers? Maybe zip code associated with the credit card used for purchases? Cashiers looking at their clothes and cars?
Maybe it’s the fact they can’t afford to eat at the usual uppity restaurants they’re accustomed to.
Let’s see how all this plays out. My child is a General Manager running a Wendy’s. They struggle to get workers and the ones they get are drug addled, ex-cons, and ghetto all along with the drama they bring. Going out to the back to smoke weed, drinking on the job, getting into fights with custuomers, an occasional illegal gun or two. He ends up working 70+ hour weeks because these scum don’t show up for work. This is an upper middle class area.
Wendy’s better increase their robots.
This is a surprise. Higher income consumers generally are trending away from fast food.
I dunno, when two meals with fries and a drink came out to over $25, that was the time I stopped going to Wendys.
Years ago-—I knew a guy who never showed ANY sign of being a multimillionaire-—he dressed no different—he drove a decent car-—and didn’t flash money.
HOWEVER he had a DAYTONA SPIDER ( ONE OF & a that time) in his garage-—and he sat on the board of 52 corporations-—most started by his father-—and he was very Smart. He still was heavily involved in those companies—day to day. He also could drive a race car very well.
I knew another person whose father was one of the 7 founders of 3-M. He was pretty wealthy for that time-—and he always liked to wear jeans with holes in the knees and sweatshirts.
His favorite game when he spent 3 months or so a year in So Calif —racing —was to call a bank-—a small one-—and ask them to let him in before 9 Am because he needed to open an account & he had appointments close to 9 Am elsewhere.
He would show up looking like a gardener-—fill out the paperwork & the account person would ask: How much would you like to deposit today???
He would pull out about $20,000 in cash (from multiple pockets-— & also a check from another state for about $50,000.... After that, he got “Yes sir-—What can I do for you, sir”-—every time he went to the bank.
He still came in dressed like a gardener.
Was a fun guy to be around & easy to like. Most of his racing competitors never knew how wealthy he was & would be in the future.
If you think someone can’t take the information from your credit card receipt and find out a whole lot about you legally including your income (or at least the income you have put on any credit application) you are naive.
When you fill out that credit app, you better believe that information is sold.
We stopped eating out for the most part, but when we do, it’s usually little family-owned hole-in-the-wall places. We find that we get higher quality food for much less money.
Gee, do you suppose the CEO could be lying to his investors?
I knew someone like this many years ago. He had a successful company and was quite wealthy. However, he was always dressed in trainers and old work-type clothes. He usually ordered simple things and was never interested in higher-end restaurants. Man, this guy was loaded, though. He raced yachts as a hobby.
So, for the price of one fast food meal you can make superior burgers for two to three people. If you plan ahead and buy the meat on a regular grocery store trip, then it is faster that driving to a fast food restaurant and waiting for your order. Quality, speed, taste.
I went to Wendy’s on Monday for Lunch. The prices were less than McDonald’s and Burger King. I like BK the most. Wendy’s is last but I was with a group who wanted to go there. It was ok.
Agree we’re all poorer.
Anecdotally, we hit the Wendy’s drive through for the first time in years last week.
They’ve done away with the grilled chicken sandwich, so we went with one fried chicken sandwich meal and an extra fried chicken sandwich.
It wasn’t bad, pretty fresh. But cost $18. We won’t be going back anytime soon.
Question....... will McDonald’s Bring back the millionaire?
Absolutely. I am not big on fast food but Wendys has a better tasting product for the money.
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