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Burger King has retaken the number two spot among US burger chains by systemwide sales, unseating Wendy's for the first time in six years.
Restaurant Brands International reported US same-store sales growth of 8.5% for Burger King in its second quarter, well above analyst expectations.
Wendy's, by contrast, reported a 7% drop in US same-store sales for its latest quarter and slashed its quarterly dividend in half to 7 cents a share to fund a turnaround.
McDonald's holds the number one position with a commanding lead, controlling roughly 48% of the US burger market in 2024, according to Barclays.
Burger King's Whopper revamp is the clearest driver of its comeback. The chain reworked the burger's bun, reformulated its mayonnaise, and improved how toppings are prepared and stacked. It also replaced paper wrapping with a box to preserve presentation.
Tom Curtis, president of Burger King's US and Canada business, said customers are returning to the chain for the first time in years. He has been fielding direct customer calls weekly and in July launched a Whopper quality guarantee, promising a free replacement for any unsatisfactory order.
Burger King has achieved its sales growth without heavy discounting. Bernstein analyst Danilo Gargiulo noted that management has kept menu price increases in the low single digits, relying instead on mix improvement from the updated Whopper and its $5 and $7 value platforms.
McDonald's US comparable sales grew just 0.8% in the same period. Its CEO cited inconsistent execution, noting that only 60% to 65% of its system was correctly running the 10-items-for-under-$3 promotion.
Wendy's withdrew its full-year guidance and its new CEO Bob Wright acknowledged the chain has a serious problem.
"Our quality differentiation has eroded, our value proposition has weakened, and we have not consistently delivered the experience customers expect from Wendy's."
Bob Wright, Wendy's CEO
Wendy's CFO said July traffic trends matched the weak second quarter, making a return to year-over-year systemwide sales growth unlikely in either the third or fourth quarter. Wright said a full strategic turnaround plan will come at the company's next quarterly update.
Burger King's turnaround, launched in late 2022, has now produced five straight quarters of US same-store sales growth. Wendy's is essentially starting that process from scratch.
