You Won’t Hear the Friendly Voice of Wendy’s CEO (WEN) Todd Bennigor Thrive on the burger chain’s new AI-powered drive.
“You wouldn’t even know the AI was taking your order, but you’d be talking to Wendy’s voice,” Bennigor quipped on Yahoo Finance Live (video above). “
But over time, you’ll likely hear a welcome robotic beep from a giant digital screen at Wendy’s drive-thru. And that could open up some fat profits — and a tighter share price — for the square burger seller.
Wendy’s will officially roll out an automated payment service in June at a company-owned venue in its home market in Columbus, Ohio. The digital dial screen will be operated by a natural language program set up by Google (GOOG, GOOGL).
Google’s software is designed to understand how consumers order from the menu, which means it makes compelling suggestions to buy more. This is better known in restaurant land as “selling out” to the customer.
Technology will also go a long way to improving Wendy’s food quality and drive-thru times, which could be welcome news for hungry, fast-food patrons.
“We’re now really thinking about how we can deal with some of the friction and make the experience more seamless in our restaurants,” Bennigor explained of the initiative. “How do we put our people in a position to be successful and make their lives a little easier in the restaurant?
Wendy’s will likely look to automate more of its checkout processes to keep pace with technological changes in generative AI and the evolution in how diners interact with the Frosty King.
Benigore is optimistic about the potential, of course. He said the company is thinking about how to create a smarter digital menu board, connect it with loyalty program Wendy’s, create more personalized menus, and get consumers to trade in their purchases.
“These are all opportunities,” Bennegor explained. “A little bit off, obviously, but you have to start piping in the platforms today to bring it all to life.”
For Wendy’s, its AI initiatives add another good story to tell investors after a mixed year of performance in 2022.
Wendy’s said Wednesday that its same-store sales in the United States increased 7.2% in the first quarter on the back of premium burger prices. High menu prices also played an important role.
The number of customers grew each month of the quarter. Meanwhile, international store sales rose 13.9%.
Wendy’s stock was up 1% Thursday morning. The stock is up 1.6% year-to-date compared to a 7% increase for the S&P 500. McDonald’s (MCD) has gained 11.7% over the year amid massive sales globally.
To keep growth going and spur the share price, Penegor told Yahoo Finance that Wendy’s will expand late-night hours this summer, promote breakfast items more, and introduce new sandwiches at premium prices.
Street is on board with all of this as potential stock price catalysts.
“The deployment of one-to-one marketing, digital expansion and loyalty program, increased headcount and speed of service, and late-night daytime part additions are all so attractive that they will only drive steady traffic in the next two years (guidelines),” writes Danilo Gargiulo, Wendy Thor and Bernstein analyst. “With such outstanding potential, the stock is trading at its 5-year low valuation and a dividend yield of 4.4%, we cannot be neutral on the stock.”
Penegor believes near-term fundamentals are where investors should focus for now, with automated payments as an earnings driver going forward.
“We are not an AI stock,” Bennigor added. “I consider us an innovation company.”
Brian Suzy He is the Executive Editor of Yahoo Finance. Follow Suzy on Twitter @tweet and on linkedin. Deal tips, mergers, activist positions, or anything else? Email brian.sozzi@yahoofinance.com
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