Wendy’s Plans Closure of Hundreds of US Stores in 2024
Wendy’s is planning to shutter hundreds of its U.S. outlets in 2024. This decision comes as the fast-food chain faces challenges with sluggish sales and declining customer visits.
Wendy’s Store Closures in 2024
Interim CEO Ken Cook announced during the recent earnings call that approximately 4% to 6% of Wendy’s 6,011 U.S. restaurants will close next year. This translates to a minimum of 241 store closures.
Sales Decline and Strategic Shift
The company reported global sales fell by 2.6% in the latest fiscal quarter, with U.S. sales dropping by 4.7%. The decline is largely attributed to fewer customer visits, although higher spending per transaction somewhat mitigated the impact.
- Global sales decline: 2.6%
- U.S. sales decline: 4.7%
- Projected closure percentage: 4-6%
- Estimated store closures: 241 (minimum)
Amid these challenges, Wendy’s is prioritizing increasing sales at existing locations rather than expanding its footprint. A comprehensive initiative, termed Project Fresh, aims to enhance customer experiences and boost profitability.
Broader Industry Impact
The quick-service restaurant sector, in general, is under significant pressure as consumers adjust their spending habits to cope with rising living costs. Many major brands are increasing promotions to attract budget-conscious diners.
Will Auchincloss, a leader in the Americas retail sector at EY-Parthenon, pointed out that many lower-income households are already curtailing discretionary spending. This trend is expected to prompt a reevaluation of pricing strategies among quick-service restaurants. As consumers tighten their budgets, restaurant spending is typically one of the first areas to experience cuts.
With the rising costs of essentials squeezing household budgets, Wendy’s and its competitors are adapting to maintain their customer bases. The company’s recent steps indicate a commitment to navigating these economic pressures effectively.
