Two years after its nationwide launch, Wendy's is set to surpass Burger King in breakfast sales.

• In early March 2020, Wendy's introduced its nationwide breakfast menu, which was launched right before dining rooms were closed due to pandemic lockdowns.
• Despite facing opposition, the burger chain remains committed to its plan and is now preparing to surpass Burger King as the second-largest burger chain in the breakfast market.
• In 2022, Wendy's anticipates a 10% to 20% increase in its breakfast sales.

Two years ago, launched its nationwide breakfast menu, achieving a goal it had been striving for nearly four decades. However, the Covid lockdowns soon followed.

Wendy's could attract new sales by entering the breakfast market without cannibalizing its lunch, snack, or dinner traffic, as breakfast was the only meal that drew a growing number of customers to fast-food chains before the pandemic.

Despite the Covid pandemic, Wendy's remained committed to its plan and continued to serve egg sandwiches and breakfast burgers, while other restaurant chains either opened later or reduced their early morning offerings. As a result, Wendy's now holds the third-largest market share in the competitive breakfast burger category, behind Burger King and a dominant player.

Wendy's U.S. breakfast sales accounted for approximately 8% of total sales in the fourth quarter of 2021, falling short of the company's goal of 10%. Despite growing breakfast sales by 25% in the previous year, Wendy's believes the daypart has potential for further growth. In 2022, the burger chain anticipates a 10% to 20% increase in breakfast sales.

Wendy's U.S. President Kurt Kane stated in an interview that while the company is currently in third place, it is only one share point behind Burger King. Kane expressed confidence that Wendy's will soon surpass Burger King and become the number two fast-food chain.

Despite its recent struggles, Burger King's U.S. business has not been able to improve its weak breakfast performance. In the fourth quarter, Burger King's U.S. same-store sales only rose by 1.8%, falling behind the metrics of both McDonald's and Wendy's in their respective home markets.

Wendy's could eventually surpass McDonald's as the top early-morning restaurant, according to Kane.

He stated that although the Frozen Arches have been at the top of the breakfast category for a long time, they will continue to take small bites and gain more market share in the rest of the category.

This spring, Wendy's is introducing its breakfast menu in all of its Canadian restaurants.

Over the past year, the company's stock has increased by 7.6%, resulting in a market value of $4.76 billion. Although it has not performed as well as the S&P 500, it outperforms the shares of McDonald's and Restaurant Brands International.

Becoming a pandemic winner

For just two weeks, Wendy's breakfast was accessible nationwide until states and localities mandated restaurants to close their dining rooms and transition to delivery, takeout, and drive-thru options.

Kane stated that the company considered modifying its breakfast plans with franchisees after lockdowns, but the operators chose to maintain the momentum.

Kane stated that we had a great beginning, surpassing all expectations in the first two weeks. If we maintained our progress, we could establish new routines and gain a large following.

Since Wendy's had already designed the first two-and-a-half hours of its breakfast service to be drive-thru only, it had a leg up on the competition.

Despite Wall Street analysts predicting that fast-food rivals would increase their breakfast promotions and advertising to retain customers, many restaurants chose to save money, cut advertising, and eliminate promotions as their sales declined.

Wendy's seized the chance to boost their marketing efforts and increase visibility.

The pandemic affected not only the competition's marketing strategies but also some fast-food restaurants' decision to stop selling early-morning meals due to staffing issues and the need to maintain profitability. Additionally, many Taco Bell locations adjusted their hours and opened later in the morning before resuming their regular schedule in September.

Despite being resilient, Wendy's has faced some challenges due to the pandemic, such as staffing shortages, which affected its franchisees. However, Kane stated that efforts to recruit more workers before the breakfast launch helped alleviate some of these issues.

Changing routines

Wendy's breakfast launch coincided with a disruption in consumers' daily routines, providing them with an opportunity to establish a new morning habit.

Although it wasn't how we planned the playbook, it might have helped us because it allowed us to construct it gradually, Kane stated.

After declining for years, cereal and orange juice sales surged, while restaurants experienced a sharp drop in breakfast demand. For instance, many of its customers delayed their visits to opt for an after-lunch coffee instead of a morning cup.

Wendy's expected its peak hours to be from 7 a.m. to 9 a.m. when people went to work. However, the company observed its longest breakfast lines during the last half hour of service.

As more consumers return to offices and schools, the pattern is shifting again.

Despite the change in pattern, breakfast mobility has returned to its pre-pandemic level, according to him.

The NPD Group reported that online and in-person traffic to restaurants during breakfast hours increased by 11% from September to November, compared to a 10% decline in the previous year.

Wendy's has used aggressive promotions to drive traffic to its restaurants and build awareness for its breakfast offerings. In November to mid-December, it sold its egg and cheese biscuit sandwiches with a choice of sausage or bacon for just $1. Kane predicts similar deals in the coming months.

Wendy's recently introduced its first new breakfast menu item since its launch, the Hot Honey Chicken Biscuit, which is a variation of the popular Honey Chicken Biscuit and is tied with the Breakfast Baconator as the chain's top-selling breakfast items.

Kane, among the two most popular options, has a clear preference: He asserts that he has consumed 720 Breakfast Baconators since its launch, which amounts to roughly one a day.

Kane stated, "On certain days, you may receive two, and other days none at all, but it's essential to maintain equilibrium."