When you operate a business, it costs you money to not be open. You still pay rent and utilities, even when you're closed. Because of that, back in my days as a toy store general manager, I tried very hard to keep the store open profitably as much as possible.
That meant not just opening the doors more, but also finding an audience for those dayparts. On Friday nights, for example, we kept part of the store open for people to play Magic: The Gathering. That meant paying someone to officiate the games and having a cashier to sell candy and snacks.
We easily sold enough food and drinks to make the time profitable, offsetting the added employee and utility costs. During Christmas season, we opened two hours earlier most days, and on Easter, I opened by myself, selling a few thousand dollars worth of items, mostly to older customers with nowhere to go. And although it would make no sense for us to be open late at night or early in the morning, I tried hard to maximize our hours while balancing costs.
That same basic calculation helps explain why breakfast can be attractive to a restaurant chain. Wendy's began offering breakfast nationally in May 2020, giving its restaurants a way to generate sales during hours when many locations had previously been closed. Those efforts initially showed promise, but the numbers have fallen, and now the company has quietly dropped breakfast at a number of restaurants, cutting back hours at others.
A recent franchisee Chapter 11 bankruptcy has led to another 120 Wendy's locations dropping, or limiting the times when they sell the morning meal. Breakfast was supposed to help Wendy's catch up to McDonald's. Instead, the chain has fallen behind Burger King and is once again the third-largest U.S. fast-food burger chain, CNBC reported.
That's not directly related to breakfast sales, but those are one of the chain's problems. Wendy's, which has closed hundreds of underperforming stores, has seen its sales slow. "Global systemwide sales declined 6.5% on a constant currency basis, primarily driven by U.S. same-restaurant sales, which declined 7.0% and the impact of 289 U.S. restaurant closures in the first half of the year," CFO Steven Cirulis said during the chain's second-quarter earnings call.
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