Financing

Wendy’s shuffles leadership to emphasize a digital future

The burger chain is changing executives’ leadership responsibilities to focus more on customer-facing technology.
Photograph courtesy of Wendy's

The Wendy’s Co. is shuffling around some of its top executives as part of a bid to place more emphasis on a future with more kiosks and mobile ordering.

The Dublin, Ohio-based quick-service chain said that David Trimm, its chief information officer, will retire early next year.

Wendy’s is instead creating a new “Digital Experience Organization” that will be overseen by its chief concept and marketing officer, Kurt Kane. And the company has started working with a consulting firm that will help accelerate the work it does on mobile ordering, loyalty rewards and self-order kiosks.

Kurt Kane courtesy of Wendy's

In addition, CFO Gunther Plosch will expand his role to oversee enterprise technology. Bob Wright, the chief operations officer, will cede his international responsibilities to Abigail Pringle to focus more on in-store technology.

Pringle, Wendy’s chief development officer, will oversee the company’s international business as the company’s chief global development officer and head of international.

Executives announced the changes on the company’s second quarter earnings call Wednesday. CEO Todd Penegor said the efforts would help improve Wendy’s international development and its restaurant experience.

But the chain is clearly focused on bolstering its digital efforts.

“We’ve taken a fresh look at all of our technology platforms,” Penegor said on the call. “We’re going to refocus our leadership structure to leverage technology across all we do.”

Digital has become a major battleground in the intense competition in the fast food space. Chains have focused more on delivery, mobile ordering and a number of concepts have added kiosks to their restaurants.

Company executives believe that competing for customers who want their food in more formats is key to maintaining Wendy’s sales momentum.

Same-store sales increased 1.9% in the quarter ended July 1, besting investors’ expectations, as the company raised some prices and generated a “slight” increase in traffic—offset by customers ordering more of the chain’s discounted offerings like the 50-cent Frosty or the 4-for-$4 value menu.

Same-store sales rose 5.1% on a two-year basis, the company said, and Wendy’s has now generated 22 straight quarters of growth in the key industry metric. Stock rose 1% in morning trading on Wednesday.

Wendy’s believes that delivery represents a major opportunity to continue generating growth in the coming years.

The company has service through DoorDash in the U.S. and Skip the Dishes in Canada, and delivery is now in 40% of the company’s more than 6,100 North American locations.

Wendy’s has expanded delivery at a more rapid pace than it had expected. And company executives said the sales they’re generating through the service are largely “incremental.”

Delivery orders have average checks that are nearly double the typical order.

“Our delivery initiative remains an encouraging opportunity,” Penegor said. He said the company gets a boost in delivery transactions whenever it advertises the service. Wendy’s plans to push the service more this year.

And the company said it is getting some of the strongest customer satisfaction scores on delivery orders.

“We feel good about how the customer is experiencing it,” Penegor said. “They’re getting their food in a manner with high integrity.”

In addition to delivery, Wendy’s has kiosks in 60% of its more than 300 company-owned restaurants and is getting higher average checks and improved throughput.

The company also wants to get more people on its smartphone app and is progressing with its mobile ordering efforts. And Wendy’s is testing a loyalty program.

“We feel like we’ve really put ourselves in a good position to differentiate ourselves on technology over time,” Penegor said. “Our focus on all of this is to go as fast as we can, but to do it in a manner that works with our restaurants and our consumers. This is about connecting with customers and bringing them back more often.”

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