DUBLIN, Ohio, Aug. 10 (Nationwide Times) — Burger King has moved ahead of Wendy’s to become the second-largest burger chain in the United States by systemwide sales, ending Wendy’s six-year hold on the position, according to CNBC and other reports.
The shift reflects a sharp difference in recent sales trends. Burger King reported an 8.5% increase in U.S. same-store sales for its second quarter, while Wendy’s reported a 7% decline in its latest quarter. Reports described the Wendy’s decline as the company’s sixth consecutive quarter of contraction.
Restaurant Brands International (NYSE: QSR; TSX: QSR), which owns Burger King, reported second-quarter Burger King system sales of $3.2 billion, according to Nation’s Restaurant News. Wendy’s system sales were reported at $2.9 billion.
The comparison matters to investors, franchise operators and workers because systemwide sales measure activity across a chain’s restaurants, including franchised locations. They are different from revenue recorded by the parent company. Same-store sales, also called comparable sales, measure sales changes at restaurants open for a comparable period and are used to track a brand’s underlying performance.
What changed in the rankings?
Wendy’s had held the No. 2 U.S. burger-chain ranking for six years, according to the reports. Burger King has now regained that position based on systemwide sales.
McDonald’s remains the largest U.S. burger chain by a wide margin. The supplied reports do not establish a single primary dataset for the ranking or fully explain how the companies’ systemwide sales were compared. They also use both systemwide sales and second-quarter system sales when describing the change.
That means the ranking should not be read as a complete measure of market share, customer loyalty or profitability. It is a sales-based comparison among major chains.
Why did Burger King gain ground?
Burger King’s 8.5% U.S. same-store sales growth points to stronger sales at restaurants that were already operating, rather than growth driven only by opening new locations. The company’s reported system sales also exceeded Wendy’s in the second quarter.
The supplied reports do not identify a named executive or provide a detailed company explanation for Burger King’s performance. They also do not include the underlying earnings release, Securities and Exchange Commission filing or investor presentation needed to examine the figures in detail.
What is happening at Wendy’s?
Wendy’s reported a 7% decline in U.S. same-store sales in its latest quarter. Nation’s Restaurant News also reported an 8.2% decline in Wendy’s system sales and a 12.5% decline in traffic, along with restaurant closures. The underlying company documents for those figures were not supplied.
The reported sales decline affects Wendy’s Company (NASDAQ: WEN), its franchisees and the people who work in its restaurants. Lower traffic can pressure restaurant operators’ revenue, while closures can reduce the number of available jobs and locations in affected communities. The supplied information does not identify specific closures, workers or local effects.
One report, MarketWatch, put Wendy’s latest same-store-sales decline at 6.3% rather than 7%. The available information does not resolve whether that difference reflects rounding, a different period or a different measurement. Most of the supplied reports use the 7% figure.
What does the change mean for customers and investors?
For customers, the national ranking does not by itself indicate that one chain has more restaurants in every local market or that prices, menus or service will change. Those outcomes depend on decisions by each company and its franchise operators.
For investors, the results show contrasting momentum at two public restaurant companies. Restaurant Brands International’s Burger King business posted positive U.S. comparable sales, while Wendy’s reported another quarterly decline. But sales growth alone does not show which company earned more profit. Labor costs, food costs, rent, franchising arrangements, advertising spending and other expenses also affect financial results.
The ranking could change again as the companies report future quarters. For now, the available reports show Burger King ahead of Wendy’s on the sales measure used for the latest comparison, with McDonald’s still in first place.
