A business update on Thursday by The Wendy’s Company revealed the impact of COVID-19 pandemic on the company's business and quick-service restaurant segment as a whole.
The company said its drive-thru and digital ordering businesses saw significant increases in the U.S for the week ended March 22. Wendy’s drive-thru business has grown to approximately 90% of its overall sales mix. Its digital business has grown to 4.3% of sales compared to 2.5% of sales in 2019, driven by strong growth in our delivery business.
Wendy’s said it is increasing its marketing focus on delivery and digital ordering and is providing digital and mobile offers. It’s directing on-site merchandising such as reader boards and media messages to inform customers that its restaurants remain open and accessible through drive-thru and delivery.
The chain noted that it hasn’t experienced any significant supply chain issues to date across the globe. It also has added Postmates to its group of delivery partners, which already included DoorDash and Grubhub in the U.S.
Similar to many retailers, Wendy’s is now evaluating its planned 2020 general and administrative expenses and capital plan and is exploring opportunities to reduce expenditures.
Also, similar to many retailers, the company has increased its cash position by drawing down $120 million under its revolving financing facility. Including the draw down, Wendy’s currently has over $340 million in cash on hand. The increased borrowing was taken as a precautionary measure to provide enhanced financial flexibility “considering the uncertain market conditions arising from COVID-19.”