US fastfood giant Wendy’s International has said it will close 15 to 18 underperforming Baja Fresh Mexican Grill outlets during the fourth quarter.
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Wendy’s chairman and chief executive officer Jack Schuessler said the store closings are aimed at positioning Baja Fresh for stronger performance in the future.
“Baja Fresh has been successful in California and in East Coast markets such as Washington, D.C. and Baltimore, but has had mixed results in other markets and declining overall comparable sales during 2004,” Schuessler said.
Baja Fresh CEO Bill Moreton said the chain has also been focusing on its menu, adapting it to meet consumer trends, simply operations and improve service times.
Menu improvements beginning on 9 November included several new products such as chipotle glazed and chile lime chicken salads, as well as four new kids’ meals, which come with apple sauce and rice as side dishes, and a choice of juice or soda.
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By GlobalDataBaja Fresh has also embarked on a more disciplined site-selection process for new outlets and slowed its development rate to focus on operations. As previously announced, Baja Fresh plans to open approximately 40 combined company and franchised stores in 2004, compared to 74 and 61 total stores opened during 2003 and 2002, respectively.
Wendy’s said it was revising its outlook as a result of charges related to the improvements at Baja Fresh. It now expects to report a fourth-quarter loss per share in the range of $1.02 to $1.23, while full-year earnings per share are expected to be in the range of $0.44 to $0.66.
The company also reported preliminary same-store sales for November. Same-store sales at Wendy’s US company stores declined 5.3%, while those at Wendy’s US franchise stores declined 4.6-4.8%. November same-store sales at the company’s Tim Hortons Canada chain rose 6.5-6.8%, while those at Tim Hortons US rose 8.2%.
“We continue to be encouraged by the strong sales momentum at Tim Hortons in both the United States and Canada,” said Schuessler. “At Wendy’s we are comparing to an exceptionally strong November a year ago. For the year to date, same-store sales are positive, as we remain focused on excellent restaurant operations, the evolution of our marketing campaign and exciting new product development plans.”
