Bob Wright, the new CEO of Wendy’s, has not minced words about the condition the chain was in when he returned to the company this year following a seven-year absence.
On the company’s earnings call last month, he lamented the brand’s “quality degradation.”In an interview with the Wall Street Journal, he acknowledged that the brand “made some decisions around quality that were rooted in efficiency and cost savings. We have let our value equation erode.”
Wright, who was Wendy’s chief operating officer before he left the company in 2019, is recreating the position in part to improve the way stores are run. Wendy’s is also working to improve the quality of its menu items, a process that began before Wright was officially hired.
It’s hardly the only company doing this. We wrote about Carl’s Jr., which is now making its burgers to order and plans more upgrades to its menu. That process was a big change, but the process has led to positive comments from customers and less waste, and the chain is now looking at additional improvements to its burgers.
McDonald’s, the fast-food giant, has periodically used menu improvements over the years to boost sales, including fresh beef Quarter Pounders in 2018. It is now testing hand-breaded chicken strips, which promise a massive upgrade to the company’s current iteration.
These efforts can work remarkably well when paired with a strong marketing message and quality operations. Burger King earlier this year upgraded its Whopper. The company’s same-store sales last quarter outperformed its fast-food burger competitors by some 900 basis points.
The chain is now upgrading its BK Chicken Nuggets and plans more product improvements in the coming months and years.
Many brands routinely look at their menu items, make improvements and then market the hell out of them, such as Domino’s famous pizza recipe change nearly 20 years ago. But fast-food chains these days have little choice but to push further into the quality arena.
These chains aren’t just competing with one another. They are competing with a crop of smaller, regional brands, fast-growing brands that have higher quality perceptions.
The burger chains have to contend with Culver’s, which seems to be unstoppable at this point, as is In-N-Out, Whataburger, and a host of smaller, younger brands. And if they want to sell more chicken, these brands have to offer better products.
In the past, fast-food chains could lower prices and run value deals or send out coupons and they could count on getting more customers. But consumers in the current environment are questioning the value they get when they visit fast-food chains, so such deals don’t work as well as they have in the past.
But there is some risk with such moves, at least when it comes to operations. Brands’ efforts on product improvements can put stress on teams if those improvements make matters more complicated. McDonald’s hand-breaded chicken strips are excellent, but hand-breading chicken takes time and raises some concern about food safety.
Burger King’s own effort at hand-breading, the Ch’King in 2021, was one of the industry’s biggest failures, precisely because of that complexity. McDonald’s is likely better equipped than Burger King was at the time to handle such a product, but that is still a risk.
Carl’s Jr. is likewise taking a risk by shifting to freshly made burgers. But brands experiencing the kind of sales declines that chain has endured in recent years need to swing for the fences.
What’s more, these quality improvements are coming as chains continue to develop new menu items that put even more pressure on operations. Restaurant chains are, once again, on pace to introduce a record number of limited-time offers after breaking records each of the previous three years, according to Technomic data.
Still, pushing for higher quality is a more-than-laudable goal. Restaurant chains cannot stand still, certainly not these days. Because their customers certainly are not.