Wendy's Wants to Move Up to "Fast Casual"

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michaelcarraher
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2012/10/15 11:05:58 (permalink)

Wendy's Wants to Move Up to "Fast Casual"

Once again, a business is willing to drive away customers it has to get customers it doesn't have.  And, it's an excuse to raise prices.

WENDY'S EXEC: 'Chipotle, Panera, Five Guys — This Is The New Standard'

Business Insider-Oct 12, 2012
Wendy's recently announced that it's giving its logo and mascot their first makeovers in 29 years. It's also redesigning its stores, which will cost about $750,000 each. Why's it making all these changes now?


Read more: http://www.businessinsider.com/wendys-chipotle-panera-five-guys-2012-10#ixzz29NdJEM8d

#1

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    bartl
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    Re:Wendy's Wants to Move Up to "Fast Casual" 2012/10/15 12:13:37 (permalink)
    michaelcarraher Once again, a business is willing to drive away customers it has to get customers it doesn't have.  And, it's an excuse to raise prices.

    Maybe not. If its customer base is shrinking, then it may not be worthwhile to go out of their way to keep the existing ones. There's a business practice that has a number of terms; I personally prefer the "downward spiral of death." The basis of it is that, in the face of shrinking business and/or greater competition, a business tries to lean down. As long as it cuts down on inefficiency, that's fine. But when it goes beyond that, then they will be cutting out things that appeal to some of the customers, without attracting new ones. So the customer base continues to shrink, causing them to lean down more, which causes the customer base to shrink more, leading to, well, a downward spiral of death.
     
    The other choice is to make fundamental changes in the business model. Of course, there is never a guarantee that this will work, but trying a solution that might work is generally superior to trying a solution that is guaranteed not to work. However, the downward spiral of death is still attractive, because it is psychologically greatly preferable to go out of business and being able to blame outside forces than it is to go out of business because you made a mistake.
     
    Bart
    post edited by bartl - 2012/10/15 12:14:50
    #2
    DawnT
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    Re:Wendy's Wants to Move Up to "Fast Casual" 2012/10/15 17:12:36 (permalink)
    The article isn't saying much besides he believes these restaurants depict the new normal in QSR. I disagree and history is going to repeat itself. These restaurants like Panera and Chipotle carved their own niche from nothing. They didn't convert from a pre-established model and are good at what they do. The economy is the dumps and there are much more people that are looking for inexpensive alternatives rather then upscale which attracts a smaller customer base that can afford it regularly. I think that's and important distinction in the numbers of available customers. 
     
    Wendy's headed down this road once before around '79 like the rest with a huge menu expansion and the salad bars, overuling and dumping  Dave Thomas over his objections from moving away from their core objectives. Anyone remember that? The new CEO at the time wanted to follow into the BK lounge territory and McDonalds was following right along with expanded offerings and ugraded dining rooms. Dave Thomas rightfully argued that they should be concentrating on what they did well. They pioneered the drive through, delivered a higher quality and distinctive product that was fresh off the grill with better ingredients and maintained a limited menu. They also had a tightly defined corparte pitch that stuck and a very loyal customer base that they essentally run off with all the changes and lost the original message in the translation. 
     
    Now were in the pits of an economic downturn and they want to play catch up and compete with another model that's foreign to their original base. It doesn't make sense. Their strenth was selling burgers the average folks could afford, very quickly with a positive experience every time and they came back several times a week for it.
     
    Look at the other side of the equation. Checker's/Rally's is on a growth phase. The new manangement team is mostly old guard Pillsbury/BK that learned lessons from the rescue and restructuring of BK years ago and probably Wendy's return to basics. It's almost the same playbook. They've conentrated on upgrading the operations on a eyecatchingly, faster and better drive through design, low priced items on the menu, simple, relentless messaging in the media about a distinctive product that's fast and fun focused to a young, loyal, and finacially challenged generation. The locations around here move traffic with two lines full of beat up cars. You don't see that with the other three.   
    #3
    FriedClamFanatic
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    Re:Wendy's Wants to Move Up to "Fast Casual" 2012/10/16 00:47:07 (permalink)
    Dawn.I sort of agree with you...........the food I have had the 4 or 5 times I have been to Wendy's Drive Thru far surpasses the BK/McD........but 3 of the times, I got home to find they had given me the wrong stuff!  And these were different places.   I'm not a big FF fan anyway, and the stuff at Wendy's in store was correct and ok.  Five guys, Jakes ( a local chain) and several other slightly upscales have moved into the area......but it's still FF. 
     If I want a really good burger, I'm not likely to be in some place open "at all hours", and I'm gonna pay 30-50% more at least.  If I'm on the road and in a hurry, well, I'll stop in the FF place....but it's never my stop of choice if there is something else local nearby.  Failing that..the Appleb/Frid/lonest/etc will win out over the "scoff and run" places
    #4
    DawnT
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    Re:Wendy's Wants to Move Up to "Fast Casual" 2012/10/16 01:38:14 (permalink)
    A thought struck me this afternoon thinking about this. Dave Thomas defined his career by moving sit down restaurants into QSR's b4 and during his time with KFC. He further refined that with Wendy's only for them to reverse the process by progressively emulating a sit down restaurant, but hands you your meal at dining room quality and prices in a paper bag. There's sort of a strange symmetry to that.
     
    Yet, the 3 generations after the 'Boomers have decreasingly less purchasing power, demand instant gratification, and claim to want fresher and healthier food, but can't afford prices presented by this model on their own. The Boomers and few Greatest Gens still around can't sustain this even though they can afford it, thier health and ability to eat this kind of food will very soon grow increasingly limited.
     
    If I'd have to hedge a bet on a model that will be sustainable for the near future, it would be a chain based on value meals of buck burgers,fries,and drinks with as little as infrastructure and labor as possible and make sure a toy appropriate for a 20 something is packaged in the box to play with.
     
    Oh, I wouldn't worry about the drive throughs anyways. They increasingly can't afford to or want to drive, but have to be able to order on-line for pick-up. Somebody better soon develop a 3d food printer.   
    #5
    SeamusD
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    Re:Wendy's Wants to Move Up to "Fast Casual" 2012/10/16 10:00:17 (permalink)
    I'd eat at Wendy's if their food was the same quality as it was 25+ years ago. You couldn't drag me into one of their restaurants now.
    #6
    bosco lover
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    Re:Wendy's Wants to Move Up to "Fast Casual" 2012/10/16 10:34:31 (permalink)
    I agree with Seamus,  Wendy's has gone downhill, and seems like it keeps getting worse. There is one just a few blocks from me, sometimes I would get lazy and get a burger,they're really terrible now.  The convenience can't overcome the blandness. they need to do something. They used to be good, fresh, a real alternative to McD's and BK. They need to try something to reinvigorate themselves
    #7
    Heartbreaksoup
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    Re:Wendy's Wants to Move Up to "Fast Casual" 2012/10/16 15:22:00 (permalink)
    My wife and I dropped Wendy's from our diet about three years ago, but in the spring, she got a $10 gift card from somebody at work.  The burgers that we purchased with the card were just about as bad as I think it is possible for a burger to get, all dry and shriveled.  It's a shame, because I still have fond memories of those juicy burgers with all the ketchup and mayo oozing everywhere from my childhood.  If the restaurant could bring back that quality with this upgrade, then it would be worth a return visit or ten.
    #8
    bartl
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    Re:Wendy's Wants to Move Up to "Fast Casual" 2012/10/17 12:07:04 (permalink)
    DawnT The article isn't saying much besides he believes these restaurants depict the new normal in QSR. I disagree and history is going to repeat itself. These restaurants like Panera and Chipotle carved their own niche from nothing.

    Panera was a spin-off from Au Bon Pain, which, at least in the New York area, has been around for the past couple of decades.

    Bart
    #9
    DawnT
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    Re:Wendy's Wants to Move Up to "Fast Casual" 2012/10/17 19:01:48 (permalink)
    The Panera Grill concept isn't new, but they appear to have found  a recipe for success that indies and small start up couldn't attain. We have a local chain, Don Pan that there'still a couple around since the mid 90's, but they never managed to achieve growth and market penetration like Panera. Most locations didn't last nor did Indies using the same concept and probably wouldn't do well outside multicultural areas.
    #10
    ces1948
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    Re:Wendy's Wants to Move Up to "Fast Casual" 2012/10/17 21:50:29 (permalink)
    Panara is almost exactly like Atlanta Bread company which seems to have disappeared from our area. I used to prefer ABC when they were across the street from each other.
    #11
    ces1948
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    Re:Wendy's Wants to Move Up to "Fast Casual" 2012/10/17 21:57:31 (permalink)
    IMO Wendy's is worse then it's ever been. We do have self serve drinks at one of our local one's but not the others. I still kind of like the frosty's but little else.
    #12
    gostillerz
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    Re:Wendy's Wants to Move Up to "Fast Casual" 2012/10/18 13:55:05 (permalink)
    Wendy's went way down hill in the past decade or so, and are getting to the price of sit down joints which serve much better food.

    The last thing I remember eating that was actually good were those chicken pita sandwiches in when I was in high school.
    #13
    eruby
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    Re:Wendy's Wants to Move Up to "Fast Casual" 2012/10/19 12:43:31 (permalink)
    Wendy's Wants to Move Up to "Fast Casual"
     
    And people in hell want ice water.
     
    I haven't been to Wendy's for a couple of years, as the last few times we went, it seemed they were TRYING to provide lousy food and poor service.  On the plus side, the value chicken sandwich had a value hamburger patty on it instead of lettuce an mayo.
    #14
    TJ Jackson
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    Re:Wendy's Wants to Move Up to "Fast Casual" 2012/10/19 16:40:39 (permalink)
    This reminds me of when Burger King tried to do waiting tables and serving "dinner baskets"
    #15
    mayor al
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    Re:Wendy's Wants to Move Up to "Fast Casual" 2012/10/23 09:14:47 (permalink)
    One thing I do like from the Wendy's Menu...The Chili !  On a cold day, one of those cups of hot chili with their hot sauce dumped in and the asked for onions and cheese on top makes a fine snack or warm-me-up, all for a buck.
       Yes, I know that's left-over burgers in it...no matter to me, just make it as hot (temp) as you can and ladle it out for me.
    #16
    michaelcarraher
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    Re:Wendy's Wants to Move Up to "Fast Casual" 2012/10/23 09:45:37 (permalink)
    UPDATE: Wendy isn't just complimenting Chipolte.  They have announced a redesign which imitates Chipolte (sincerest form of flattery). 
    Good news: The new design is a lot cheaper than the old design.
    Bad news: They aren't doing anything about the menu or food quality.
    http://www.dailymail.co.u...r-industrial-look.html
    #17
    easydoesit
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    Re:Wendy's Wants to Move Up to "Fast Casual" 2012/10/23 14:44:44 (permalink)
    mayor al

    One thing I do like from the Wendy's Menu...The Chili !  On a cold day, one of those cups of hot chili with their hot sauce dumped in and the asked for onions and cheese on top makes a fine snack or warm-me-up, all for a buck.
      Yes, I know that's left-over burgers in it...no matter to me, just make it as hot (temp) as you can and ladle it out for me.

     
    I am right next to you in the pickup truck, just make that two orders, and how about that pretty good baked potato for a buck to go along with it?  A little 'butter' with it, and extra sour cream is cheap enough.  And then we're eating healthy!
    #18
    the grillman
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    Re:Wendy's Wants to Move Up to "Fast Casual" 2012/11/10 18:05:14 (permalink)
    If you have to eat fast food, Wendy's is head and shoulders above the others like McD, BK, and Hardees.  Not as good as Culvers, though....
    #19
    pnwchef
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    Re:Wendy's Wants to Move Up to "Fast Casual" 2012/11/10 20:29:13 (permalink)
    Fast food has to change because people are changing. CMG is doing a great job with its super burrito with all fresh ingredients. The only problem with CMG is trying to keep food prices down while food costs are on the rise. Only the strong will survive, Mcdonalds is feeling the pinch right now, they will not be the best of breed unless they start serving fresh cooked, hot off the grill foods. I don't see much hope for Windy's and Burger KIng, unless they come up with a great concept. Taco bell is taking share away from CMG, they are doing a great job with there new stores, they combine Long john silver with Taco bell, they stores and upbeat modern and offer a nice menu for everyone.........Yum brands that owns Taco Bell, KFC, Pizza Hut is growing leaps and bounds in China with its KFC leading the way...........I wouldn't expect fast food any more, maybe medium fast................ya can't have both and expect good quality food......................pnwc
    #20
    SeamusD
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    Re:Wendy's Wants to Move Up to "Fast Casual" 2012/11/12 10:44:06 (permalink)
    I got my mother a gift card for Wendy's for her birthday so she doesn't have to pay for Frosty's for a while. Those are her favorite thing and at least the quality of those haven't deteriorated like their other food.
    #21
    MellowRoast
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    Re:Wendy's Wants to Move Up to "Fast Casual" 2014/02/10 08:16:14 (permalink)
    I used to love Wendy's but, in my opinion, their food has suffered for nearly 20 years.    Speaking of their new store concept, they're remodeling a Dalton, GA location (about 25 miles from here). The store will feature two fireplaces, a Wi-Fi bar, TVs, and a drink station with more than 100 beverage varieties.  Hope they'll put one here soon -- might be a nice Wi-Fi hangout when needed.  I still like their chili and Frosty.
    post edited by MellowRoast - 2014/02/10 08:17:47
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