Wendy's Announces Hundreds of U.S. Store Closures to Combat Falling Profits
Wendy's plans to close hundreds of underperforming U.S. restaurants to boost falling profits, following a 5% decrease in same-store sales and a 7% drop in shares.
Overview
- Wendy's is set to close hundreds of underperforming U.S. restaurants in the coming months, aiming to improve overall profitability and address declining sales figures.
- The fast-food chain anticipates a 'mid-single-digit percentage' of its U.S. locations will be affected, potentially leading to around 300 store closures if 5% are impacted.
- This strategic move comes after Wendy's reported a 5% decrease in U.S. same-store sales during the July-September period compared to the previous year.
- In addition to closures, Wendy's plans to invest in struggling stores by adding new technology or equipment to enhance their performance and attract more customers.
- The decision reflects a broader trend among U.S. fast-food chains struggling to attract lower-income consumers amid rising prices and inflation, impacting profits.
Report issue
Read both sides in 5 minutes each day
Analysis
Center-leaning sources cover this story neutrally, focusing on reporting the facts of Wendy's store closure plans and the stated reasons. They provide context regarding previous closures, industry challenges, and the company's financial performance without injecting editorial bias. The reporting is straightforward, presenting information directly from the company and market data.
"Wendy’s plans to close hundreds U.S. restaurants over the next few months in an effort to boost its profit."
Fortune"Wendy’s plans to close hundreds U.S. restaurants over the next few months in an effort to boost its profit."
ABC NewsArticles (3)
FAQ
Wendy's anticipates closing around 300 U.S. stores, which represents approximately 5% of its locations.
Wendy's reported a 12% drop in net income, a 5% decrease in U.S. same-store sales, and a 7% decline in shares, driven by weaker margins and asset impairments.
Wendy's plans to invest in struggling stores by adding new technology and equipment, transfer some locations to different operators, and shift marketing to emphasize value and freshness.
U.S. fast-food chains, including Wendy's, are struggling to attract lower-income consumers as inflation raises prices, impacting profits across the industry.
$5 and $8 meal deals, similar to McDonald's offers, have helped bring some traffic back to Wendy's stores, but the company still struggles to attract new customers.
History
- This story does not have any previous versions.