Fast food chain Wendy's is set to close 140 of its locations, primarily those that have underperformed or no longer align with the company's growth objectives.
The decision, announced during Wendy's third-quarter earnings call, is part of a broader strategy to enhance the brand's financial stability and position it for future growth.
Wendy's Eyes New Openings in Strategic Growth Areas
Although specific locations for these closures have not been disclosed, CEO Kirk Tanner explained that the targeted restaurants are outdated and underperforming in comparison to the chain's standards, according to CNN.
Despite these closures, Wendy's plans to open new restaurants in areas with better growth potential, which will help offset the losses. The company envisions these new locations with an updated design featuring more efficient kitchen layouts, modernized interiors, and additional pick-up windows to meet evolving customer demands.
According to Tanner, "This initiative is designed to ensure that over time, many of these closed units will be replaced by new restaurants with better sales and profitability."
Wendy's Sees Sales Boost
Wendy's has seen its sales figures improve over the last quarter, partially attributed to a SpongeBob-themed promotion that has resonated well with customers. Tanner noted that the campaign builds on Wendy's core menu, and he highlighted the enduring popularity of the brand's signature fresh, never-frozen square burgers.
Wendy's revenue for the quarter was mixed, with same-store sales coming in at 0.2%, slightly below market expectations. However, the company remains optimistic about the quarter's outcome, as the SpongeBob meal continues to drive strong consumer engagement.
The closures are not exclusive to a single region, and Wendy's stressed that this decision follows a thorough evaluation of each location's performance and potential. Wendy's currently operates around 6,000 locations across the US, and with new outlets in development, it expects to maintain its overall footprint while enhancing profitability.
In addition to Wendy's, other chains, including Denny's and Shake Shack, have recently announced similar closures, aiming to consolidate their locations in a challenging economic environment.
