Wendy's is on track to overtake Burger King as the United States' second-largest fast-food burger chain next to McDonald's, according to an analyst's report released on Tuesday.
We expect Wendy's to overtake privately-held Burger King for the number-two market-share position within the limited-service hamburger sector, perhaps as soon as this year, Mark Kalinowski, an analyst with Janney Capital Markets wrote in his report, according to the Orange County Register. Janney Capital has a buy rating on Wendy's.
Kalinowski wrote in his analysis that Wendy's increased share has been driven by a focus on premium foods and the reshaping of restaurants. By continuing to stress the premium and better quality of its foods, such as the introduction this year of Dave's Hot 'N Juicy Cheeseburgers, Kalinowski told the newspaper it has been able to get into position to overtake Burger King.
He also noted by not marketing itself as a McDonald's clone, Wendy's has helped itself.
According to figures by Technomic, a market research firm in Chicago, McDonald's is in no danger of giving up its market share, which stood at an astounding 49.5 percent. In 2010, though, Burger King held a 13.3 percent market share while Wendy's trailed with 12.8 percent.
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Wendy's has never been able to crack more of a share than Burger King, but this approach has enabled the company to get on track to doing just that.
We've never really seen Wendy's surpass Burger King before, Kalinowski told the OC Register. I think it will happen.
Kalinowski outlines his plan for Wendy's to surpass Burger King in his report: increasing sales by continuing to remodel stores with modern amenities like fireplaces and flat-screen televisions.
And he said Wendy's plans -- like its updated chicken sandwich and tests to sell products like specialty coffees -- should keep the company on track to grow its market share.
There's more to come, he said.