Wendy's plans to close hundreds of U.S. restaurants starting in Q4 to improve profitability and modernize its brand amidst declining sales and challenges attracting lower-income consumers.
Wendy's is set to close approximately 300 U.S. restaurants, representing a "mid-single-digit percentage" of its 6,011 domestic locations, starting in the fourth quarter of this year. This strategic move, announced by interim CEO Ken Cook, aims to boost profit, enhance the appeal of remaining stores, and address underperforming or outdated locations. This follows the closure of 240 U.S. Wendy's in 2024. The company intends to either improve struggling stores with technology and equipment, transfer ownership, or close them entirely, believing this will improve traffic and profitability. The decision comes as U.S. fast-food chains grapple with attracting lower-income consumers due to inflation. Wendy's reported a 4% drop in U.S. same-store sales, a 2% decrease in revenue to $1.63 billion, and a 6% fall in net income to $138.6 million in the first nine months of the year. While $5 and $8 meal deals have helped some traffic, the company plans to shift its marketing focus to emphasize value and ingredient freshness to attract new customers. Wendy's shares saw a significant drop, falling 7% on Friday and an additional 5% on Monday.
