NEW YORK, N.Y. – All the online buzz aside, there’s another reason why Wendy’s impending rollout of a pretzel burger has the fast-food chain excited: the profit margins.
The Associated Press reported in January that Wendy’s was testing the “Pretzel Bacon Cheeseburger” in select locations including Miami. Then an analyst for Janney Montgomery Scott recently noted that the company said the burger would be rolled out nationally this year as a promotional item. That sparked plenty of online chatter this week, mostly positive.
But the concoction wasn’t created just to please taste buds. The burger is a reflection of Wendy’s emphasis on offering more premium breads that raise perceptions about the quality of its food without increasing its own costs too much.
A unique bun, for example, gives a burger a higher-quality veneer that lets Wendy’s charge higher prices. The chain has made a similar push recently with flatbread chicken sandwiches.
That’s better for Wendy’s profit margins than giving customers more meat to charge premium prices, particularly at a time when beef prices have been climbing. Mark Kalinowski, the Janney analyst, raised his forecast for sales at Wendy’s restaurants open at least a year to 5 per cent in the third quarter, citing the possibility that the burger would be released during that period. That’s an increase of three percentage points.
The burger is in line with a push by Wendy’s to cast itself as being on the higher end of the fast-food industry, which it says will allow it to charge higher prices more in line with Panera and Chipotle.
CEO Emil Brolick and other Wendy’s executives have noted that small adjustments like bread can have a big impact on how customers perceive the quality and healthfulness of the chain’s food. It’s not just the pretzel bun; Wendy’s has said it’s looking at a variety of options, including flavoured buns and wheat buns.
Of course, there’s the fun factor for customers, too. Taco Bell’s test of a breakfast waffle taco with egg has generated excitement online as well.
A spokesman for Wendy’s Co., based in Dublin, Ohio, wasn’t immediately available for comment.