Wendy’s Rides Strong Digital Momentum, Expects $1.5 bn in Digital Sales in 2023

Wendy’s, which runs 7,000 restaurants worldwide, said it is set to achieve new heights in its digital sales, with an anticipated global digital sales figure of over $1.5 billion for the year 2023. The fast-food retail giant’s commitment to digital transformation is yielding impressive results, evident in the recent financial report for the second quarter.
Wendy’s digital transformationWendy’s does not reveal its annual investment in digital transformation initiatives. Wendy’s Chief Information Officer is Kevin Vasconi responsible for planning its IT spending.

Kevin Vasconi, who joined Wendy’s in 2020, is responsible for Wendy’s global technology efforts, including Consumer-facing Digital, Restaurant Technology, Enterprise Architecture and Technology, and Information Security. Before Wendy’s, Kevin Vasconi worked with Domino’s Pizza.

During the period of April to June 2023, Wendy’s reported a notable 4.4 percent increase in revenue, reaching $561.6 million. This growth can be attributed to multiple factors, including a surge in sales at its Company-operated restaurants, a rise in franchise royalty revenue, and an increase in advertising funds revenue.

Todd Penegor, Wendy’s President and Chief Executive Officer, highlighted the substantial profit expansion driven by robust same-restaurant sales momentum. This led to a remarkable over 200 basis point year-over-year increase in the U.S. Company-operated restaurant margin.

The company’s expansion efforts were also reflected in its restaurant openings. In the second quarter alone, Wendy’s launched 41 new restaurants, including the debut of its first Global Next Gen restaurant concept. These openings contributed to a total of 80 new restaurants in the first half of 2023.

Wendy’s digital strategy continued to pay dividends during the second quarter, as global digital sales maintained a strong position, accounting for over 12 percent of the sales mix. This performance comes on the heels of a significant acceleration achieved during the first quarter. Notably, digital sales dollars surged by more than 25 percent year over year.

To enhance the accuracy and comprehensiveness of their digital sales reporting, Wendy’s expanded its digital sales definition to encompass in-restaurant mobile scans. This move aims to provide a more holistic view of the company’s digital portfolio and align reporting practices with industry standards.

Internationally, Wendy’s is observing a robust adoption of digital channels, contributing to a digital sales mix exceeding 17 percent. In the U.S., the success of the March Madness promotion extended into the second quarter, contributing to steady digital gains. U.S. digital sales mix remained strong, surpassing 11 percent and achieving a digital sales growth rate of over 25 percent year over year.

The company’s U.S. digital performance also benefited from late-night advertising initiatives and extended operational hours. Wendy’s loyalty program saw continued success, boasting over 3.5 million monthly active users. This achievement is attributed in part to the ongoing progress in the company’s one-to-one marketing program.

Looking ahead, Wendy’s is focused on delivering personalized user experiences to drive increased frequency, average transaction value, and operational efficiency. The company is dedicated to finding innovative solutions to optimize its restaurant economic model, ensuring continued growth in the ever-evolving fast-food industry.

Rajani Baburajan