Monday, June 13, 2011

Wendy'sTo Sell Arby's

The headline this morning, "Wendy's To Sell Arby's" caught my attention. I had no idea that the "Arby's" chain of roast beef fast food restaurants was owned by "Wendy's."

They apparently merged less than 3 years ago, on September 29, 2008.  The merger created the 3rd largest fast food company in the United States, according to their press release at the time.  The President and CEO is quoted therein as saying, "I am delighted to announce the completion of this merger, which creates a world-class company with the strength, scale and expertise necessary to thrive in a competitive restaurant environment. As one company, we are well-positioned to deliver long-term value to our stockholders through enhanced operational efficiencies, improved product offerings, shared services and strong human capital."

He's still the company President today.  I wonder which specific parts of the above statement proved to be untrue.

THIS article from September 2009, may shed some light on why Arby's is being sold now.  It reads in part, "Arby’s also has changes that should pay off for the brand, Smith said. The chain is focusing on getting what it calls its 'medium Arby’s customer,' he said. During the recession, these customers have cut back on visits because Arby’s average ticket of $7.50 is high for fast food, Smith said."  I was shocked when I read that Arby's (of all places) is one of the most expensive fast food chains.

THIS Businessweek article from September 2010, terms the Wendy's-Arby's merger a disappointment that's been "unpalatable to investors."  A two sentence history of the company in this article caught my eye. "Founded in 1964, Arby’s carved out a niche with thinly sliced roast beef sandwiches and curly fries. It set itself apart from behemoths like McDonald’s by appealing to an older, higher-income, and better educated consumer." Really?  Can Arby's really be the fast food chain for higher-income, better educated people?  I always thought of it as a tired and uninspiring third choice of last resort.

How horrifying (on multiple levels) would it be to learn that you had been identified by their marketing department as a so-called "medium Arby's customer"?

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