Wendy’s resets international strategy in bid to boost sales

In the face of stiff competition at home, Wendy’s is again looking abroad for growth.

The Dublin-based burger chain is looking to reset its strategy to capture more momentum overseas where rivals Burger King and McDonald’s have long thrived. Wendy’s opened its 500th international store earlier this year, but Burger King has more than 10 times that many while McDonald’s has more international stores than Burger King and Wendy’s combined.

Wendy’s needs an international push for growth, said John Gordon, principal of Pacific Management Consulting Group and a restaurant industry analyst.

With the U.S. restaurant industry staring at stagnant traffic growth and rising labor costs, overseas markets can be the right place to find steady success. Wendy’s CEO Todd Penegor noted that international stores grew sales by 13 percent in the third quarter, compared to U.S. sales growing at just over 1 percent. Yet, Wendy’s hasn’t found much traction with franchisees overseas.

Gordon said Wendy’s netted six new international stores during the quarter, after accounting for those that closed. “That’s terrible,” he added. Wendy’s adopted a new strategy three or four years ago of choosing a few countries and building a lot of stores, a strategy dubbed going narrow and deep. The company has focused on the Middle East and South America. Gordon figures Europe is played out, with Burger King and McDonald’s dominating that landscape.