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Wendy’s Says Beef Is Back on the Menu as Supply Returns

By Rich Duprey – Jun 9, 2020 at 9:21AM

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The coronavirus pandemic forced beef producers to close factories.

The beef shortage may be coming to an end. Wendy's (WEN -0.37%) says the supply chain issues brought on by the coronavirus that forced meat processors to close factories or operate at reduced capacity has been alleviated.

The "beef supply has returned to near-normal levels," the fast food chain announced, meaning the burgers it previously removed from the menu at some of its restaurants are back.

Man taking big bite out of a burger

Image source: Getty Images.

There's the beef

Wendy's was forced to take drastic action last month when it was unable to meet consumer demand for its burgers due to supply chain issues in some areas. To resolve the problem, it took burgers off the menu at some locations and promoted other protein options like chicken sandwiches.

Top supplier JBS, which supplies nearly a quarter of the country's beef and one-fifth of its pork, thought the shortage would last for months as it was operating at 70% to 95% capacity and would "not be able to go to full capacity anytime soon."

At one point, 20% of all Wendy's restaurants were sold out of beef. Costco and Kroger also ran low. But the supply-chain ravages of the COVID-19 outbreak have proved less severe than originally predicted, and beef supply constraints are easing.

Bloomberg reports beef prices that soared upwards of $475 per 100 pounds in the first weeks of May have fallen for 18 straight days, according to the Department of Agriculture, and now goes for just over $254 per 100 pounds.

Wendy's same-store sales were hurt due to the shortage, but analysts believe comps turned positive in June.

 

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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Stocks Mentioned

The Wendy's Company Stock Quote
The Wendy's Company
WEN
$18.69 (-0.37%) $0.07
Costco Wholesale Corporation Stock Quote
Costco Wholesale Corporation
COST
$472.27 (-1.40%) $-6.71
The Kroger Co. Stock Quote
The Kroger Co.
KR
$43.75 (-2.08%) $0.93
JBS S.A. Stock Quote
JBS S.A.
JBSAY
$9.40 (0.43%) $0.04

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