Wendy's Moves Fast Amid McDonald's Confusion

Wendy's Moves Fast Amid McDonald's Confusion
by Karlene Lukovitz, Tuesday, Sep 2, 2008 5:00 AM ET

Moving fast while arch rival McDonald's is still sorting out the fate of its hugely popular $1 double cheeseburger, Wendy's is replacing its 99-cent Stack Attack with a slightly different--although already existing--99-cent burger, the Double Stack Cheeseburger.
Simultaneously, Wendy's is launching a marketing push promoting the Double Stack in tandem with two existing 99-cent sandwiches on its Value Menu, the Junior Bacon Cheeseburger and Crispy Chicken Sandwich.
If this seems a tad hard to follow, even those in the trenches may be finding things a bit confusing these days, as the $1 burger and overall value-priced menu war escalates.
Fast-food bloggers have been typing overtime since early August, when The Wall Street Journal broke the story that McDonald's, in response to higher cheese prices and expected higher beef prices this fall, is testing changes to the $1 double cheeseburger. That item has been both the anchor of McD's eight-item Dollar Menu and a main sales driver since 2003.
McDonald's confirmed that the chain is exploring ways to make the burger less expensively, and that it is possible that the item might be replaced with another value burger offering. Meanwhile, some of its franchises have been cutting their losses via strategies ranging from upping the price of the traditional burger to keeping the $1 price but reducing the cheese from two slices to one, or offering the burger sans cheese.
All of this would seem to create at least a temporary chink in McDonald's' armor. Wendy's did come right out and state in its release that by marketing the three value sandwiches, it is going "head-to-head against the double cheeseburger offered by Wendy's largest competitor."
Wendy's spokesperson Bob Bertini also acknowledges that Wendy's has "heard that competitors are considering tinkering with their prices," and that Wendy's "sees this as an opportunity for us." At the same time, Bertini emphasizes that Wendy's aggressive, new triple-play marketing strategy is based, in the words of Wendy's CMO Paul Kershisnik, on "giving customers more choices and more value for their money at a time when they're trying to stretch their dollars further and can use some help."
"By marketing the sandwiches as a trio, we're giving consumers a compelling reason to take another look at our Value Menu," adds Bertini. He also notes that Wendy's has frequently run value promotions during the harried back-to-school time frame, and that this makes even more sense this year, given that "funds are particularly tight."
But why replace the Stack Attack, which was launched last December, with a burger combo that differs only in its toppings? Both items offer two junior-sized burger patties with cheese in the center, but the Attack carried mayo and ketchup toppings, while the Double Stack is crowned with ketchup, onion, mustard and pickles.
While some might note the greater similarity of the Double Stack's toppings to those on the McD cheeseburger, Bertini says Wendy's burger switch was based on the "stronger equity" of the Double Stack. The Double Stack has been offered in some U.S. markets for years, and its national rollout as a Stack Attack replacement reflects the strength of its performance, he says.
Clearly, since the Double has more toppings and is otherwise identical to Stack Attack, cost reduction is not a factor in the switch, as Bertini points out.
Wendy's kicked off the value trio campaign over the weekend, with a promotion at 400 participating restaurants in Florida. On Labor Day, the restaurants presented their first 50 dine-in customers with a book of 52 coupons for free Double Stacks (a one-year supply). A total of one million coupons were given away.
The integrated campaign will launch early this month, and will include national television, local radio and other elements, according to Bertini.
Meanwhile, on the third front, Burger King is battling cost hikes by testing the $1 Whopper Jr.--with hamburger patties that are 0.2 ounces smaller than the current ones, according to Dow Jones Newswires.
Karlene Lukovitz can be reached at klukovitz@klmedialink.com.

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