Wendy’s will shutter hundreds of U.S. restaurants in the coming months as the fast-food chain battles declining profits and customer traffic.
The Dublin, Ohio-based company announced that it expects to close a “mid-single-digit percentage” of its 6,011 American locations. That could mean roughly 300 stores if 5% are affected.
The closures underscore mounting pressure on fast-food chains as inflation-weary consumers cut back on dining out. Wendy’s joins rivals struggling to lure price-conscious customers despite aggressive discounting.
This latest round follows 240 U.S. store closures that have already been completed in 2024. The 55-year-old chain acknowledged that many locations have become outdated.
“When we look at the system today, we have some restaurants that do not elevate the brand and are a drag from a franchisee financial performance perspective. The goal is to address and fix those restaurants,” interim CEO Ken Cook told investors Friday, according to AP News.
Cook, who took the helm in July after Kirk Tanner departed for The Hershey Company, stated that underperforming stores negatively impact both finances and customer service. Some struggling locations will receive upgrades, including new technology or equipment.
Others will change ownership or close permanently. The company will begin shuttering stores in the fourth quarter.
Wendy’s same-store sales dropped 4% in the first nine months of 2024 compared to last year. Revenue fell 2% to $1.63 billion while net income declined 6% to $138.6 million.
Cook acknowledged that the chain struggles to attract new customers, despite offering $5 and $8 meal deals that match those of McDonald’s. He expects lower-income consumers to remain under pressure through the end of the year.
The company plans to shift marketing to emphasize value and ingredient freshness. Wendy’s shares tumbled 7% on Friday and fell another 5% in afternoon trading on Monday.