Wendy’s beef shortage will last weeks, 1 in 5 stores not selling burgers

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Wendy’s expects the beef shortage that’s affecting about 1,000 of its US restaurants to continue for the foreseeable future.

CEO Todd Penegor said on an earnings call Wednesday that Wendy’s will probably experience a “couple of weeks of challenging tightness that we’ll have to work through” before getting back to normal.

On Tuesday, Wendy’s said some of its menu items might be “temporarily limited at some restaurants” because of the national meat shortage. Though its delivery schedule remains unchanged, supply has been tight because beef suppliers across North America face production challenges during the pandemic.

Analysts at financial firm Stephens scoured the online menus of Wendy’s 5,500 US restaurants and found that one in five are not selling hamburgers or other beef items. Instead they’re highlighting chicken sandwiches.

Penegor acknowledged that certain items will be removed from menus from “time to time” during the shortage.

“We do believe it is temporary, and we’re close with our big supply partners,” he added. “We have several of them on the fresh beef front, and we do believe we’ll work through this in short order.”

He also noted that while some restaurants aren’t displaying beef on their online menus, it doesn’t necessarily mean the restaurant is completely out of beef. Restaurants have the ability to customize their online menus and some have chosen not to display beef items to prevent dissatisfaction since supplies are low.

“It doesn’t mean you’re out of beef at the restaurant level, but you wouldn’t want to really disappoint a consumer if they looked in mobile order and said you had beef, and then they drove to the restaurant and you are out,” he said.

It’s “hard to quantify” the material impact the shortage might have on Wendy’s profits, Penegor added, because customers could be buying other menu items instead.

Still, Wendy’s stock soared more than 6% in Wednesday trading after revealing that US same-store sales have been rebounding every week since hitting a low the first week of April. The company also said that its newly launched breakfast menu is exceeding expectations.

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