DUBLIN, Ohio (Reuters) - Wendy's International Inc WEN.N is aiming to roll out inexpensive sandwich wraps and a new hamburger to increase sales as the U.S. economy weakens, Chief Executive Kerrii Anderson said on Tuesday.
“We have to grow the top line,” Anderson told Reuters in an interview at the company’s headquarters, referring to sales.
“The consumer environment from a year ago has changed drastically,” she said. “I am very concerned about the consumer overall and their confidence level.”
The restaurant industry is being squeezed by higher ingredient costs while U.S. customers grapple with higher gasoline and food costs and concerns about falling home values and the possibility of recession.
“We are very focused on driving traffic,” said Anderson.
Also, Wendy’s directors have also been weighing a sale since June 2007 under pressure from billionaire investor Nelson Peltz, who wanted better performance from the company.
Peltz, whose Triarc Companies Inc owns the Arby’s chain, has since offered to buy Wendy’s and has said he plans to seize control of the No. 3 hamburger chain’s board.
CEO Anderson is not part of a special committee appointed to decide Wendy’s fate and had no update on its progress.
Plans for international expansion and selling company-owned restaurants, which could boost results, are on the back burner until the committee makes a decision, leaving Anderson limited options with which to fight McDonald's Corp MCD.N and Burger King Holdings Inc BKC.N.
NEW PRODUCTS TO ENTICE CUSTOMERS
Anderson, who has helped Wendy’s improve margins with restructuring and cost controls, is focused on ending five years of declining traffic with one of the company’s most aggressive new product lineups since the mid-1990s.
Still, she said: “We don’t think we’re going to flip the switch and it’s going to change overnight.”
Wendy’s plans to introduce a spicy version of its Baconator sandwich next month and to roll out value-priced wrap sandwiches in the first half of 2008.
The Spicy Baconator is the first extension of Wendy’s meat-heavy Baconator line, which debuted last year and targets men in the 18 to 34 age group, which visits fast-food restaurants more frequently than any other group.
Anderson said Wendy’s new $1.49 Go Wrap sandwiches, which include lettuce and chicken, fit into the snack and value categories and should appeal to women.
The company also plans to offer salads topped with hot chicken this summer, Anderson said.
Wendy’s, known for using fresh beef, has struggled to find a successful marketing message since the 2002 death of company founder Dave Thomas, who was an advertising cult hero and starred in more than 800 commercials starting in 1989.
A recent advertising campaign that featured characters in red wigs sparked a lot of debate but not sales.
Wendy’s newest campaign, its fifth since Thomas’ death, includes back-to-basics ads that, as Anderson says, “make food the hero” by focusing on quality.
She hopes the new ads will attract customers to its nearly 6,000 U.S. restaurants.
Wendy’s will know in about six months whether the campaign has achieved that goal. In the meantime, Anderson says Wendy’s has a winner with its new cod sandwich, which will only be sold through March.
“Fish is very good for us,” said Anderson, who would not elaborate on the impact the sandwich has had on traffic and sales.
“There is a lot going on with the consumer right now,” Anderson said.
Wendy’s has warned that January was a tough month for business.
Editing by Toni Reinhold