Wendy’s breakfast menu could overtake Burger King, 2 years after

Two years ago, Wendy’s launched its breakfast menu nationwide, finally crossing the finish line for a goal it tried and failed at for nearly four decades. Then came Covid lockdowns.

Before the pandemic, breakfast was the only meal that drew a growing number of customers to fast-food chains. Lunch and dinner traffic was shrinking as consumers chose healthier options or made their meals at home. For Wendy’s, entering breakfast would allow the burger chain to attract new sales without cannibalizing its lunch, snack or dinner traffic.

Wendy’s stuck to its plan even as Covid took hold, serving up egg sandwiches and breakfast burgers as rival restaurant chains opened later or trimmed their early morning offerings. It now holds the third-largest market share of any burger chain in the competitive breakfast category, behind Restaurant Brands International’s Burger King and a dominant McDonald’s.

By the fourth quarter of 2021, breakfast sales accounted for roughly 8% of Wendy’s U.S. sales, still shy of the chain’s goal of 10% of total U.S. sales. Last year, the company grew its breakfast sales by about 25%, and Wendy’s thinks the daypart has more room to grow. In 2022, the burger chain expects its breakfast sales to climb an additional 10% to 20%.

“For us, right now, we’re very solidly and very quickly established as the number three, but we’re only about a share point behind Burger King,” Wendy’s U.S. President Kurt Kane said in an interview. “Our first job is to leave them behind, which we’re very confident that we’re going to be able to do here in the not-too-distant future.”

Burger King’s U.S. business has struggled in recent years, and its weak breakfast performance hasn’t helped. In the fourth quarter, Burger King’s U.S. same-store sales rose just 1.8%, trailing both McDonald’s and Wendy’s metrics for their home markets.

And even though McDonald’s is still the dominant player in the early-morning daypart, Kane said he thinks Wendy’s could eventually become number one.

“We think the Frozen Arches have had plenty of time at the top of the breakfast category, but I think we’ll obviously keep nipping away at that and gobbling up share across the rest of the category,” he said.

In late February, Wendy’s announced it would be taking its breakfast menu to all of its Canadian restaurants this spring.

Shares of the company have risen 7.6% over the last 12 months, bringing its market value to $4.76 billion. The stock has underperformed the S&P 500, but it’s doing better than shares of McDonald’s and Restaurant Brands International.