In any market, there are winners and losers. In the fast food wars, there is a definite leader and multiple also-rans who have been chasing the Golden Arches for decades. One of those once and future contenders is Wendy’s, a brand that has tried many different gimmicks and programs through the years in order to try to steal some market share from the big dogs on the block.
But it’s not so easy being Number Three in a marketplace that seems determined to become a two-brand battle. For Wendy’s, profits and sales are off missing forecasts with a weak two-percent sales increase.
Some are saying this lull is extremely temporary, just a result of lower sales thanks to major hurricanes in Texas and Florida. Others are just not buying that. Industry leaders McDonald’s and Burger King went through the same hurricanes in the same areas, and they are still pulling market share away from Wendy’s.
Smarter money is on the idea that McDonald’s marketing efforts are just working better than Wendy’s As the latter chain promoted its “fresh never frozen” beef message, McDonald’s unleashed its McPickTwo discount plan. Turns out that, while people appreciate fresh, they are going to fast food joints for fast, cheap food … not necessarily fresh food. Which should have surprised no one.
This is a lesson that Wendy’s may be learning, though. The company recently announced the expansion of its discount menu, including 50-cent Frostys and a four for $5 meal deal.
Investors are still worried. Conventional wisdom says, in a three-way race, the two leaders will pull market share from number three before going after each other. This seems to be the case in this situation. McDonald’s and Burger King appear to be the beneficiaries of Wendy’s ill fortunes, and these appear poised to hang on to their gains.
That’s not to say Wendy’s will always be relegated to third place. It’s extremely tough to make it from three to two, but it is possible. It would take much different thinking at Wendy’s to capture the fan base and sales necessary to creep into that number two spot. The brand would have to find a way to be seen as the better all-around option to one of the big two. To be seen as the first choice by more fans, rather than a “better alternative.”
If Wendy’s can create that tipping point, they have some hope of pulling out of this slump, but they need to do something fast, because, right now, things are looking pretty frosty.
Ronn Torossian is the Founder and CEO of the New York based public relations firm 5WPR: one of the 20 largest PR Firms in the United States.