**Wendy’s to Close Hundreds of U.S. Restaurants Amid Declining Sales**
Wendy’s has announced plans to close hundreds of its U.S. restaurants in the coming months as revenue and profits continue to decline. The fast-food giant cited cutbacks by lower-income consumers—a trend it expects will persist through the end of the year.
On a Friday investor call, Interim CEO Ken Cook did not specify the exact number or locations of the restaurants slated for closure. However, he indicated that the company was likely to shut down a “mid-single digit percentage” of its 6,011 U.S. locations. This could mean approximately 300 store closures if 5% of existing restaurants are affected. The closures are expected to begin in the fourth quarter of this year.
Cook explained that shuttering underperforming locations would improve both customer traffic and overall profitability at the remaining U.S. restaurants.
Fast-food chains nationwide have struggled to boost sales as lower-income consumers feel the squeeze of rising food costs. Both Wendy’s and competitor McDonald’s have rolled out value meal options to attract diners. Despite these efforts, Cook doesn’t anticipate financial relief for these households anytime soon.
> “We do see more pressure on the lower-income consumer,” he said Friday. “We continued to see that in [the third quarter] and we expect that to continue into the fourth.”
This latest wave of closures follows the shutdown of 240 U.S. Wendy’s locations earlier in 2024. At the time, the company cited outdated facilities at many of its 55-year-old restaurants as a contributing factor.
Cook, who took on the role of interim CEO in July after Kirk Tanner departed for a leadership position at Hershey Co., noted that Wendy’s will try to revitalize some struggling stores by adding technology or equipment. In other cases, it may transfer ownership to new operators or close the locations altogether.
> “When we look at the system today, we have some restaurants that do not elevate the brand and are a drag from a franchisee financial performance perspective. The goal is to address and fix those restaurants,” Cook said during the investor call.
In the first nine months of this year, Wendy’s reported a 4% decline in U.S. same-store sales (locations open at least a year) compared to the same period last year. Total U.S. revenue fell 2% to $1.63 billion, while net income dropped 6% to $138.6 million.
Cook said $5 and $8 meal deals, which have been matched by McDonald’s, have helped bring some traffic back to U.S. stores. However, he acknowledged Wendy’s is struggling to attract new customers and announced plans to shift marketing efforts to emphasize the brand’s value and the freshness of its ingredients.
Despite the challenging news, Wendy’s shares rose 10 cents (1.1%) to $8.63 in early Tuesday trading, though they remain down 46% for the year.
https://www.cbsnews.com/news/wendys-closing-restaurants-hamburger-chain-closures/