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Wendy's Makes a Huge Push Into Breakfast

By Daniel B. Kline - Mar 2, 2020 at 10:35AM

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The company wants to take market share from rivals including McDonald's.

Wendy's (WEN 1.45%) wants a piece of the breakfast market. That makes sense because the morning meal has been a steady revenue producer for rivals including McDonald's (MCD 1.52%) and Restaurant Brands International's (QSR 0.73%) Burger King.

Wanting to succeed and achieving success, however, are very different things. The fast-food chain has tried breakfast before and failed. This time it's taking a different approach and pulling out all the stops.

A Doordash employee carries a Wendy's bag.

Wendy's wants to make its mark on breakfast. Image source: Wendy's.

How is Wendy's doing breakfast?

The fast-food chain has decided to roll out breakfast nationally instead of taking a staggered approach as it has in the past. It's also offering a menu that borrows from its lunch and dinner favorites including a Breakfast Baconator and a line of Frosty-ccinos.

Wendy's also has been handing out coupons for free return breakfast visits in select markets. It has also made every effort to get the word out including a massive ESPN sponsorship of the morning show Get Up. The ESPN deal includes Wendy's sponsoring the show and host Mike Greenberg appearing in ads featuring the new breakfast items.

Why is Wendy's going after breakfast?

McDonald's and Burger King can be open for more hours because of their breakfast menus. That's a huge boost to the bottom line, because those chains have already paid for real estate. Being open more hours allows them to make more sales.

Wendy's has an uphill battle here, but it's engineered for success. The chain's stores will offer breakfast via drive-through starting at 6:30 a.m. but its dining rooms won't open until 9:30 a.m. That will help keep costs down and make it easier for franchisees to take the long-term morning battle to McDonald's, Burger King, and the other players in the breakfast space.

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Stocks Mentioned

The Wendy's Company Stock Quote
The Wendy's Company
WEN
$18.86 (1.45%) $0.27
McDonald's Corporation Stock Quote
McDonald's Corporation
MCD
$251.87 (1.52%) $3.78
Restaurant Brands International Inc. Stock Quote
Restaurant Brands International Inc.
QSR
$51.14 (0.73%) $0.37

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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