Wendy’s to offer half salads on menu

By Dow Jones Newswires
Posted Sep. 15, 2010 at 8:33 a.m.

Wendy’s is making its next push behind salads by cutting the serving in half, hoping to keep sales of its upgraded salads strong by offering them at a lower price.

Wendy’s, a unit of Wendy’s/Arby’s Group Inc., later this month will add half-sized versions of its new higher-end salads, which come in varieties like Apple Pecan Chicken and BLT Cobb, for $3.99. It’s also adding a “Pick 2” menu where, for $4.99, customer can add-on items like a baked potato, small chili, a Jr. Bacon Cheeseburger, chicken wraps or drinks that normally cost between $1 and $1.49.

After adding a pricey new salad line in July for $5.99, Wendy’s is now adding the smaller size to accommodate diners who want the salad as part of their meal, not the only dish. It also offers Wendy’s latest new product at a more palatable price for customers who want to spend less.

“We know a lot of people like to spend around $5 for lunch,” Ken Calwell, Wendy’s marketing chief, said in a recent interview. Wendy’s will back the new offer with national advertising starting Sept. 27.

The revamped salads, made from a mix of nine greens, and corresponding marketing campaign, doubled the number of salads Wendy’s sold compared with last year, Calwell said, ahead of company expectations.

The smaller salads will probably cut in a bit into sales of the full-sized versions, Calwell said, but he expects the new deal to attract enough new customers to salads to make up for it.

The offer could also help the average sale to each customer, which has taken a hit across fast food as consumers stuck to value menu options and pared back their orders. “It should be a ticket driver, and if they get attachment sales on the salad, even better,” Tom Forte, restaurant analyst at Telsey Advisory Group, said.

Boosting the average sale is key for fast food, especially as sales of value menus remained strong. Research firm NPD Group on Tuesday said sales from value menus grew in the most recent quarter.

Wendy’s “Pick 2” offer resembles one from fast-casual chain Panera Bread Co. (PNRA), which offers a deal of a half-sized salad and soup. The offer has been popular at Panera, while also friendly to margins, since the total price is more than selling just one item.

Calwell wouldn’t discuss the margins on the Pick 2 meal or the salads, saying the offer is more to promote its new salads while offering customers choice with the combo.

Wendy’s upgraded salads are part of the chain’s strategy to position itself as having higher-quality food than its fast-food hamburger rivals like McDonald’s Corp. and Burger King Holdings Inc. Wendy’s in recent years has upgraded to a more expensive cut of bacon, added burgers with blue cheese and improved buns. It’s also testing new French fries with sea salt.

While Wendy’s sales have fared well, its sister brand Arby’s has struggled mightily amid a perception as being too expensive, though it has added a value menu this year. Wendy’s/Arby’s shares closed Tuesday at $4.55, down 10 percent over the last 12 months, though they’ve perked up 12.1 percent in the past month as some investors see it as a take-out target in the wake of Burger King’s recently announced buyout.

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One comment:

  1. Pallie Sep. 15, 2010 at 12:35 pm

    Basically the new Wendy’s $5.99 salads are the old salads with new names at a much higher price. A brilliant marketing strategy until you get to the check out. After the new salads debuted I ordered one w/ a large soda and the tab was $8.50. A lot of money for sugar water and green leafs. I changed my order to a Classic Single combo.