Wendy’s, the leading restaurant chain, has showcased its financial resilience and digital prowess during the third quarter of 2023, overcoming challenges while achieving remarkable milestones.
Despite anticipated declines in customer counts and mix, the company’s strategic pricing actions and digital transformation initiatives drove significant growth.
Kevin Vasconi is the Chief Information Officer (CIO) of Wendy’s, responsible for technology efforts, including consumer-facing Digital, restaurant technology, enterprise architecture and technology, and information security. Prior to joining Wendy’s in 2020, Kevin Vasconi served as Chief Information Officer at Domino’s Pizza.
Wendy’s has reported revenue of $550.6 million and profit of $58 million during the quarter of 2023.
“We have opened 152 new restaurants across the globe this year and solidified our development pipeline through new agreements in key growth markets,” Wendy’s CEO Todd Penegor said.
Wendy’s does not reveal its investment in digital transformation. Global digital sales mix reached 13 percent, and total digital sales surged by 30 percent year-over-year, driven by the momentum of their loyalty program.
Wendy’s saw a notable upswing in year-over-year customer counts from mid-August through the quarter’s end, showcasing a promising trend. One of the standout achievements of the quarter was the impressive growth of Wendy’s digital business.
This digital success translated into another quarter of profit expansion, with an 80 basis point year-over-year increase in U.S. company-operated restaurant margin, reaching 15.6 percent. Sales growth fueled profit leverage, while a decline in commodity inflation further contributed to the positive results. The company’s commitment to development was also evident, as they opened 72 new restaurants worldwide in the third quarter, bringing the year-to-date total to 152 openings. With 100 percent of their current year pipeline either open or under construction, Wendy’s remains on track to meet its 2023 development target.
Wendy’s digital business excelled in the third quarter, with a global sales mix of 13 percent and a 30 percent year-over-year increase in total sales. Internationally, Wendy’s continued to see strong adoption of digital channels, leading to a sales mix of over 18 percent. In Canada, the company now holds the number two position in digital traffic share among QSR burger segment brands, while the U.K. saw digital sales mix exceed 90 percent. In the U.S., the digital sales mix grew to over 12 percent, with a substantial uptick in the loyalty program playing a significant role.
The total U.S. loyalty program membership reached over 35 million, with monthly active users growing by nearly 40 percent quarter-over-quarter to over 5 million as the third quarter concluded. Wendy’s attributed this impressive growth to offers that resonated with customers, such as the celebrated $0.01 JBC promotion in honor of National Cheeseburger Day, which allowed in-store offer redemptions and expanded loyalty reach.
The strong 30 percent year-over-year growth in U.S. digital sales was driven by success across all digital channels, including delivery. Wendy’s partnerships with third-party delivery providers, coupled with engaging advertisements and exclusive offers, helped drive growth. As a result, Wendy’s increased its global digital sales expectations to approximately $1.8 billion this year, representing over 20 percent growth year-over-year.
Looking forward, Wendy’s remains optimistic about its digital growth potential. The company noted a significant uptick in monthly active users and the revised digital sales expectations as just the beginning. Wendy’s emphasized its confidence in the continued execution of digital plans alongside key partners to drive digital business growth in the coming years. Moreover, with 100 percent of the current year pipeline open or under construction, Wendy’s is well on its way to achieving its 2023 global net unit growth target of approximately 2 percent.