- Many Wendy's customers are still struggling despite stronger economic growth and low unemployment, according to the fast food chain's CEO.
- Lower-income diners "are not participating in the real wage growth to the extent of the rest of the consumer base," Wendy's CEO Todd Penegor says.
Many customers who frequent Wendy's are still struggling despite stronger economic growth and low unemployment, according to the CEO of the company, the nation's third-largest fast food burger chain.
Asked about the health of the American consumer from his point of view, Wendy's Chief Executive Officer Todd Penegor told CNBC on Wednesday that "It's still be a bit challenging … [because] about 40 percent of our consumers are $45,000 and under from an income bracket. And they're not participating in the real wage growth to the extent of the rest of the consumer base."
Penegor's assessment stands in stark contrast to what Target CEO Brian Cornell told CNBC last month. Cornell said Target is "benefiting from a very strong consumer environment," adding it may be "the strongest I've seen in my career." Cornell has spent more than three decades in retail.
Perhaps the higher, $64,000 per year, median household income for Target shoppers compared with Wendy's customers can explain the disparity between how the CEOs view trends in consumer spending, which accounts for two-thirds of the U.S. economy.
But like brick-and-mortar retail stores, Wendy's needs to get people out of their homes and into its restaurants.
"You need a compelling offer: fast, convenient and affordable. But people are looking for quality too and we can deliver that with all of our fresh-cut vegetables in the restaurant everyday and our fresh beef," Penegor said on "Squawk Box."
McDonald's, the No. 1 fast food burger chain in the U.S., abandoned frozen patties for fresh for its signature sandwiches, a development Penegor welcomes. "We've been fresh on every hamburger at every restaurant since 1969. It validated that fresh does taste better," he asserts.
Penegor, however, does recognize that the idea of convenience is being redefined. Mobile ordering and in-store kiosks, developed in-house, and in-home delivery via a partnership with DoorDash are taking on more importance.
"What we're seeing on delivery is our highest-rated overall satisfaction. So convenience trumps everything. Our average check is one and a half to two times more than the average check in the restaurant," he said. "We're seeing a new tail wind today. It's still small in the spirit of our same-restaurant sales."