Does Yum! Brands Want to Take a Bite Out of Wendy’s?
With same-restaurant sales down, McDonald’s (NYSE:MCD) is having a hard time convincing customers to purchase its burgers. But Wendy’s (NASDAQ:WEN) is having no such problem — innovative new menus and redesigned locations have pushed up sales in six of the past seven quarters.
Thanks to the burger chain’s complete transformation, Barron’s contributor David Englander noted in a recent article that these positive changes make Wendy’s an ideal takeover target for Yum! Brands (NYSE:YUM), which does not have a burger restaurant in its portfolio of fast-food chains.
Much attention was given to the marketing strategy of McDonald’s after the hamburger chain reported a surprising 2.2 percent decline in same-store sales in October. The company posted another decline in January, with sales down 1.9 percent, bringing its problems with competition to the forefront of investors’ minds. One of the chains bringing that competition is Wendy’s, where sales have increased 4.9 percent in the past two years. What McDonald’s lacks, the Ohio-based company has: popular new menu items, more focused marketing, and dramatically remodeled stores.
Because of these improvements, Wendy’s gained share in the hamburger and chicken sandwich markets…