Fast-food chain Wendy's/Arby's Group Inc. is planning a massive effort to revitalize its flagging Arby's brand, rolling out a dollar menu nationwide next month and pouring millions into revamping restaurants.
The news comes after an important sales measure skidded 11 percent at the restaurant chain known for its roast beef sandwiches and curly fries. Revenue fell almost 7 percent as customers continued to skip its typically more expensive menu.
"We've lost a significant number of transactions and sales," CEO Roland Smith told investors during a conference call Thursday.
After failing to gain traction with its $5 meal deals, Arby's began testing its dollar menu last year. It plans to expand that menu to at all of its 3,700 locations in April. The menu includes a small roast beef or chicken sandwich as well as curly fries.
"We're going to need to compete in this dollar value menu area of our business," said Smith, who took over day-to-day leadership of the chain in January.
The chain also plans to remodel hundreds of restaurants during the next three years and launch a national advertising effort as it reinvigorates the brand.
For the quarter that ended Jan. 3, the Atlanta company lost $13.6 million, or 3 cents per share. That compares with a loss of $393.2 million, or 84 cents per share, during the previous year.
Excluding those one-time costs, the company earned 7 cents per share. Its quarterly adjusted profit was 5 cents per share in 2008.
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