- WHITE PAPERS
Wendy's has launched its new line-up of premium salads. It's deja vu all over again.
The question is, can history repeat itself?
A little over a decade ago, Wendy's introduced big entree sized salads when all other quick-serve competitors offered unappetizing side salads. Along with other innovative menu introductions (e.g. premium chicken sandwiches), Wendy's became the primary consumer choice for QSR menu fare.
Wendy's was the leader in innovation and the majority of competitors were followers. That's when Wendy's leadership of the early 2000s drove sales and the brand was envied by everyone.
Wendy's enjoyed its premium positioning for only a few short years. McDonald's,
Burger King, Jack in the Box and nearly every other competitor introduced their own version of premium entree salads and chicken sandwiches, and Wendy's competitive advantage was neutralized.
With the death of its beloved founder Dave Thomas in 2002, Wendy's seemed to have lost its identity and its mojo. Wendy's brand relevancy plummeted as McDonald's and Burger King, in particular, seized control of menu innovation. The QSR herd had new leaders and Wendy's was significantly less relevant.
Fast forward to today and Wendy's appears poised for another comeback effort. With sales on the rebound after a crippling recession and with a rapidly increasing consumer demand for fresh ingredients, Wendy's is betting on a 'healthier' menu line-up that will be both competitively compelling and highly profitable.
Wendy's must be tired of being a follower, because they are beginning to act like a 'Brand Champion' leader again.
The new Premium Salads are a defining moment for Wendy's. There is no better menu category that defines restaurant quality and fresh ingredients than salads. Promoting premium salads is the cornerstone to a strategy that elevates Wendy's commitment to fresh, high quality ingredients throughout their menu.
Historically, salad sales at fast food restaurants have been anemic. Except during times of heightened advertising and discounting, salad sales rarely climb north of 5 percent of total sales. Additionally, there are few categories of food sales that require as much attention as those required by salads...from resourcing, purchasing, inventory, storage, prep and assembly to quality control and waste.
Despite these issues, Wendy's new salad line-up will likely have tremendous initial success in boosting transactions, sales and profitability. Coupons and advertising (along with positive word-of mouth) should generate huge trial.
The price tag of $5.99 (easily +$1.00 over competitive offerings) should not present a barrier to re-peat purchase as long as the delivered salad is unquestionably better than (1) previous Wendy's salads and (2) clearly superior to the competition.
Any surge in Wendy's salad sales will likely represent incremental transactions — which is why the effort to introduce these fresh ingredient salads is worth the hassle and risk.
Can Wendy's Premium Salads alone provide a long-term sustainable competitive advantage? Not Likely.
Competition will either recognize Wendy's efforts as a failure (requiring no response) or as a success (which means new "fresh" designer salads are accelerated through the pipeline at McDonald?s, Burger King, et. al.). Success breeds imitation, which diminishes any initial competitive advantage.
Can Wendy's pursuit of an innovative menu focused on higher quality, freshly prepared ingredients (e.g. fresh beef, Applewood bacon, premiumsalads) be a strategy that provides a long-term sustainable competitive advantage? Definitely!
Wendy's will need to be relentless in its pursuit to elevate all menu categories to embrace high quality and fresh ingredients. This requires a long-term marketing calendar that is relentless in communicating fresh value. Being ahead of the trend curve is paramount to gaining leadership. Wendy's is moving in the right direction.
Stuart Morris owns and operates QSR Consulting Group Inc., which assists brands by creating profit-driven strategies that leverage core competencies.