Wendy's CEO: Our wounds were 'self-inflicted'

Wendy's new CEO on Monday called the dour results of the past few years "self-inflicted wounds" and vowed to do better, laying out plans that included hiring top-tier workers and reclaiming market share from higher-end competitors like Five Guys and Smashburger.

Emil Brolick, the CEO since last September, told investors on Monday that he was intent on winning back customers, jaded by a stale menu and inconstant service, as well as investors, who have grown weary of "a little bit of overpromising and under-delivering".

And rather than blaming the struggling economy for the revenue declines and quarterly losses of the past few years, Brolick said that the company's problems were its own fault. Though Wendy's had carved out a niche in the restaurant business as fast food for grown-ups, it had lost its way in recent years.

"These are not DNA issues," said Brolick, who also worked at Wendy's during the more halcyon days of the late '80s and early '90s. "These are issues we caused, and any time you have self-inflicted wounds, you can correct self-inflicted wounds."

Brolick said he was intent on taking back lost market share from the likes of fast-casual competitors like Panera and Chipotle, offering food that was just as good but at a lower price. The company has revamped its menu and is remodelling stores. It sold Arby's, which had been a drag on earnings, over the summer. And it's now intent on hiring top-tier employees, Brolick said.

Brolick, who was most recently a top executive at Yum Brands Inc., said he's bringing all Wendy's locations up to consistent standards for friendliness and cleanliness, rather than current, unpredictable state of "one there is really, really good but this one over here isn't quite what it needs to be".

"We've made great progress in getting rid of those F restaurants and getting more As and Bs, but we're still in that territory," Brolick said.

New people hired

He also said he'd hire store managers on par with the people he sees at higher-end competitors like Chipotle and Panera. "Those folks at the bottom corner, there's a job waiting for them at our competitors," said Brolick, who has also hired a new general counsel at the Ohio headquarters and is adding a chief marketing officer and chief people officer.

Brolick said it was important to grab market share from higher-end competitors because he doesn't want to "be caught in the middle". Companies need to appeal to either low-end shoppers, such as Wal-Mart and Costco do, he said, or to high-end shoppers, such as Tiffany or Nordstrom.

Like many fast-food chains, Wendy's is taking some of its turnaround plans from McDonald's book. The much-larger burger chain has introduced new offerings like fancy coffee drinks and smoothies meant to appeal to higher-end customers who previously might have shunned it. It has remodelled restaurants and added wireless access for the same reasons. And it has kept prices at fast-food levels so that its reliable base of cash-strapped customers don't flee for cheaper hamburgers at the gas stations.

It has run into some resistance from franchisees who sometimes have to foot the bill for the changes.

- AP