Wendy’s breakfast gains market share, McDonald’s to bring Szechuan sauce back March 31

Yahoo Finance's Brooke DiPalma details Wendy's breakfast sales forecasted to increase in 2022, in addition to McDonald's decision to bring back its Szechuan sauce.

Video Transcript

RACHELLE AKUFFO: Welcome back to "Yahoo Finance Live." I hope you're hungry. Wendy's is gaining ground in the breakfast category after launching at the onset of the pandemic in 2020. Yahoo Finance's Brooke DiPalma is here with the details. Brooke.

BROOKE DIPALMA: Rachelle, that's right. It's been a long time coming for Wendy's to finally make way and break into the breakfast category. They debuted for a short time in 1985, and then tested again in the mid 2000s. But now two years after this 2020 campaign launched, they finally think they cracked the code.

I spoke to Kurt Kane, president and chief commercial officer at Wendy's. And he told me in an email, quote, "Just two years into launching breakfast, we've left almost all our quick service restaurant competitors behind, vaulting into the number three share position. Fast forward into the not too distant future, Wendy's will be number two, and focus on rescuing people from the subpar breakfast offered at the Frozen Arches." He said, "They deserve better." Of course, taking a stab there at competitor, McDonald's.

But Wendy's has the numbers to back that sort of statement. In 2021, the US breakfast category saw Q4 sales peak to approximately 8.5%. And in fiscal year 2021, sales grew to nearly 25%. But there's big hopes for 2022. As we make way into the new year, Wendy's breakfast category expects weekly US sales of 3,000 to 3,500 per restaurant by year end. They also expect sales to climb 10% to 20%.

And this spring, of course, starting today in Q2, any day now, we should expect them to launch a breakfast menu in Canada. Of course, they debut two new items in February. But investors don't seem to be, quote, unquote, "loving it year-to-date." They're down 8.3%.

- All right. Brooke, I am here for the breakfast wars. Bring it on. I mean, clearly you've struck a nerve in our live show Slack channel because we've got some fanfare for the McDonald's hash browns as well. So shifting gears, and since we're talking about McDonald's. From one fast food giant to another, McDonald's is bringing back a fan favorite to its menus for a limited time, Sichuan sauce. You've got to tell us when and where customers can find it.

- Well, Brad, Rochelle, and Dave, get this. It's going to be available on the app starting on March 31. It'll be a limited run only while supplies last. But McDonald's assuring us that they'll have enough. They said in the email to Yahoo Finance that they worked closely with the supply chain to ensure a proper amount of Sichuan sauce is available at all locations. It'll come for free with chicken McNuggets order.

But it's important to note this is the fourth return since 1998 debut. Of course, there was a promotional debut with Milan. Sparked lots of controversy when it was brought back in 2017 because of the animated series, "Rick and Morty." Yep, "Rick and Morty." But now, 2022, it's back on the menus beginning on March 31.

Of course, this is all part of the ongoing effort at McDonald's to really get fans to engage with their app. In 2021, we saw $18 billion in sales. We also saw digital sales make up 25% of total sales at McDonald's top six markets. So I know I'll be looking out for it on the app on March 31. Whether or not it'll do well, I guess we'll to wait and see.

- All right. We're going to be watching closely for that. Yahoo Finance's own, Brooke DiPalma. Appreciate the update there.