Dive Brief:
- Wendy’s has named Kirk Tanner to replace President and CEO Todd Penegor effective Feb. 5, the company announced Thursday.
- Tanner joins the company following a five-year stint as CEO of North American Beverages at PepsiCo, Inc. according to an 8-K filed by Wendy’s. Prior to that, Tanner worked in the beverage giant’s Global Foodservice division. Penegor has led Wendy’s since 2016, and has worked at the company for over a decade.
- In recent years, Wendy’s has faced development challenges. In particular, the closure of the chain’s Reef Kitchens ghost kitchen units in the U.S. led Wendy’s to cut its projected 2025 unit count by about 750 restaurants. Late last year, a major franchisee of the company, Starboard Group, filed for Chapter 11 bankruptcy protection following declining customer counts and expensive remodels.
Dive Insight:
Despite Wendy’s about-face on its ghost kitchen business, the company’s U.S. systemwide sales have still risen, jumping 6% over the first three quarters of 2023 Same-restaurant sales also increased 4.7% in that same time period, according to the chain’s most recent earnings release.
Wendy’s success in recent quarters has been supported by the growth of its late-night and breakfast sales. The brand is leaning on value items, like the 2-for-$3 Biggie Bundle, to regain traffic lost in Q3 from consumers earning less than $75,000 in household income. But with restaurants growing again and prices much higher than pre-COVID-19, it’s unclear if discounting will be enough to sustain strong traffic growth.
According to the press release, Tanner’s experience at PepsiCo included efforts to grow Pepsi’s “presence in foodservice through strategic partnerships, new product lines and significant deals with major sports leagues and restaurant chains.” As Wendy’s looks to new dayparts to drive its sales, that experience may prove useful.
Earlier this week, Wendy’s hired Tatiana Lambert from Yum Brands to oversee its U.S. development efforts. In Jan. 2023, the company cut its chief commercial officer role as part of a restructuring of its corporate decision-making process.
During the implosion of its U.S. deal with Reef Kitchens, Wendy’s announced a new prototype for its restaurant design, the first of which opened last year. That unit, with a redesigned galley kitchen, promised operational efficiencies. To entice franchisees to build new units, Wendy’s also implemented a new incentive program that included reduced royalty rates and fee waivers.
