Wendy’s soon could leapfrog Burger King as the second-largest burger chain in terms of U.S. market share, according to a new research note from securities analyst Mark Kalinowski of Janney Capital Markets.
For years, Wendy’s has been the third-largest U.S. burger chain in terms of size and market share, behind No. 2 Burger King and No. 1 McDonald’s, which has more than 14,000 domestic restaurants.
But Kalinowski wrote that Wendy’s soon could command more of the limited-service hamburger market, despite having fewer locations than Burger King, with 7,523 U.S. restaurants.
The vast majority of Wendy’s more than 6,578 restaurants are located in North America. The brand is testing four different prototypes in several markets this year and said it would embark on a wider remodeling plan over the next few years, which Kalinowski wrote could increase same-store sales 4 percent to 6 percent per year.
While Wendy’s and Burger King both have been upgrading their menus over the past year, Wendy’s has had more sales success during that time. Same-store sales swung from negative to flat for the first quarter, and then increased 2.3 percent for the second quarter and 0.9 percent for the third quarter.
By contrast, Burger King’s same-store sales losses, while narrowing sequentially, were 6 percent for the first quarter, 5.3 percent for the second quarter and 0.3 percent for the third quarter.