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Spicy Nuggets drive Wendy’s sales

The company says its same-store sales rose to their strongest level in four years following the return of the popular product.
Photograph courtesy of Wendy's

Wendy’s customers apparently really love their Spicy Nuggets.

The burger chain said Friday that its same-store sales rose 4.4% in North America in the third quarter, its best performance in nearly four years. The company provided the preliminary figure at the start of a presentation to investors.

Much of the credit for that goes to its Spicy Nuggets, which the company brought back in mid-August, driven by consumer demand and fueled by Wendy’s popular Twitter account.

“Spicy Nuggets are working,” CEO Todd Penegor said during the event. He also said that the company’s strategy, called “One more visit, one more dollar,” is also working to generate more customer sales.

To be sure, at least part of the improvement came from easier comparisons. Same-store sales declined slightly in the third quarter a year ago, but even when that’s factored in, the company’s sales accelerated.

On a two-year “stacked” basis, same-store sales rose 4.2%, up from a 3.3% two-year stacked result in the second quarter.

Wendy’s stock was up 2% in early morning trading on Friday. It’s up about 15% over the past year.

In addition to its planned introduction of breakfast next year, Wendy’s said it will work on its value offers and technology in the coming months. The Dublin, Ohio-based company said it plans to introduce a loyalty program next year, for instance. And executives said they plan to “evolve” Wendy’s value menu, noting that 20% of its orders are less than $4.

Wendy’s also said that it is testing a black bean burger and could introduce that nationwide next year, hoping to get on the plant-based burger bandwagon but without using products from Impossible Foods or Beyond Meat.

The company is also planning to spend $20 million this year to prepare its breakfast introduction in the first quarter of next year. Executives believe that breakfast could ramp up quickly once it’s introduced, and that it could soon become 10% of sales, which would make it a nearly $1 billion business.

“We believe we’ll be successful right out of the gate,” Kurt Kane, president of Wendy’s U.S. market, said during the presentation.

Wendy’s is planning to focus heavily on mobile ordering and other digital strategies. The company said its digital sales are up 325% this year, though that still represents a small 2% of total sales.

The company said that it wants 10% of its sales to be through digital channels by 2024.

Wendy’s says it has “doubled down” on mobile ordering. Mobile order customers’ average check is 20% higher than normal.

“I like our digital customer,” said Laura Titus, Wendy’s chief digital experience officer.

Wendy’s plans to start offering delivery through its mobile app by the end of this year. And it is integrating delivery into its point-of-sale system.

Titus said that the company is happy with its relationship with DoorDash, which typically gets a Wendy’s order delivered within 30 minutes. But Wendy’s plans to start using other delivery providers next year, believing that could give the company access to customers who might use Grubhub, Uber Eats or others.

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