Wendy’s Closes Restaurants: A Strategy for Market Trends and Digital Growth

Wendy’s announces the closure of 140 restaurants worldwide, despite impressive profit margins and recent expansion.

At a Glance

Wendy’s plans to close 140 stores worldwide by the end of 2024
The closures are part of an effort to update older, outdated restaurants
Net unit growth will remain flat in 2024 due to these closures
U.S. sales have increased by 1.4% in 2024, reaching over $9.3 billion
There are currently 7,292 Wendy’s locations worldwide, with 6,011 in the U.S.

Strategic Closures Amid Growth

In a surprising move, Wendy’s has announced plans to close 140 stores worldwide by the end of 2024. This decision comes despite the company’s recent growth and impressive profit margins. The closures will affect restaurants both in the United States and internationally, as the fast-food giant aims to streamline its operations and focus on modernizing its brand.

The decision to shutter these locations is part of a broader strategy to update older, outdated restaurants and align with changing market demands. Wendy’s CEO Kirk Tanner explained the reasoning behind the closures, stating, “I think when you think about strengthening our system, you look at a brand that’s 55 years old and some of those restaurants are quite out of date. And that’s really kind of the punch line on that one. It’s not one particular area.”

Wendy's closing 140 more restaurants https://t.co/WbpuMb7NJw

— Yahoo Finance (@YahooFinance) November 1, 2024

Impact on Growth and Expansion

The closure of 140 stores will result in flat net unit growth for Wendy’s in 2024. However, it’s important to note that the company has opened approximately 500 stores over the past two years, indicating a period of significant expansion prior to this announcement. Some of the planned closures were moved up from future years (2025, 2026, 2027), which is expected to lead to a unit growth rate of 3% to 4% in the following year.

Despite the closures, Wendy’s continues to show strong financial performance. U.S. sales have increased by 1.4% in 2024, reaching over $9.3 billion. International sales have also seen growth, rising by 2.1% and totaling over $1.4 billion. These figures suggest that the company’s overall strategy is yielding positive results, even as it makes tough decisions about individual store locations.

Current Footprint and Future Outlook

As of now, there are 7,292 Wendy’s locations worldwide, with 6,011 of those in the United States. The company has added a net total of 19 stores in the U.S. in 2024, showing that growth is still occurring alongside the planned closures. This strategic realignment of resources suggests that Wendy’s is focusing on quality over quantity, ensuring that each location is well-positioned for success in an increasingly competitive fast-food market.