Wendy's Spends on Growth
Wendy's Co. is focused on investing in long-term brand-building efforts--like its new breakfast menu, restaurant designs and marketing strategy--after posting strong sales for the fourth quarter. But the restaurant operator might be biting off more than it can chew.</br></br>On Monday, Wendy's shares fell 3.8% to $5.01 on the Nasdaq Stock Market, following the company's investor day, when analysts questioned the sustainability of Wendy's recent growth trends, given continued commodities head winds, general economic uncertainty and the high cost of carrying out all of its turnaround efforts.</br></br>Wendy's said it hopes to spur long-term growth by investing this year in menu innovation, continuing tests of its new breakfast menu and even-newer Black Label premium burgers. Its other major long-term sales driver is its portfolio of four new restaurant-design prototypes that are more modern and entice diners to eat inside, where they typically spend more money.</br></br>"McDonald's is investing billions into its facilities. Ours are looking dated, old and run down," said Chief Operating Officer Steve Farrar. "We are clearly not the cool place to go to these days."</br></br>The new remodels bring in flat-screen TVs, Wi-Fi, a clear view of the kitchen and other elements that Wendy's says have given its competitors an advantage with consumers in recent years.