Who would’ve picked Wendy’s as the better performer for its new parent? Yet the burger chain clearly left its sister, the Arby’s sandwich concept, getting cold under the heat lamps at the end of 2008.
The sandwich chain will attempt to close the gap this year with what could be dubbed the Jan Brady Defense, a.k.a. I’ll Show That Marcia: Hit your sibling with a putdown while trying to be just like her.
The putdown part is everywhere, from Sports Illustrated’s swimsuit issue to social-media sites like Twitter and gads of internet pages where moms share coupons for free stuff. The chain will be the sponsor latter this month of the NCAA March Madness playoff brackets showcased on Facebook. The promotional efforts all tout Arby’s new Roastburgers, “the burger done better.”
The next phase will be claiming the high ground in the sandwich segment, just as Wendy’s asserts it's the best in burgers. Slated for later this year are introductions of more premium sandwiches made with roasted meats, including turkey, ham, and one of Wendy’s staples, chicken.
But, like Wendy’s, Arby’s is trying to win bargain-hunters at the same time by studding its menu boards with a few head-turning deals. CEO Roland Smith said the sandwich chain has concluded tests of a dollar menu, a pick-four-for-$5 bundling deal, and $1.99 roast beef “patty melts.” The most successful of those trial items, he told investors yesterday, will be introduced later this year. But, of course, he didn’t say which of those it would be. The tease came after he'd attributed the chain’s drop in comparable sales at the end of 2008 to heavy discounting by other fast-food sandwich specialists.
Smith may have foreshadowed Arby’s discounting efforts by talking about Wendy’s roster of bargains, all priced at 99 cents. The line-up has been trimmed down, with such choices as chili, a baked potato and chicken nuggets shifted off that section of the menu and repriced at $1.19 to $1.39. A new ad campaign spotlights three of the remaining value lures, including a double burger.
That re-engineering has lowered the percentage of sales generated by the value menu to 15%, compared with 20% a year earlier. Smith called that mix “more in line with our peers.”
Smith suggested that Wendy’s margins might be helped by a plan to launch a purchasing co-op later this year.
Meanwhile, he revealed, the burger specialist will try to underscore its premium position by upgrading its sandwich buns, adding new premium chicken items, and developing a signature hamburger that commemorates the concept's 40th anniversary.