Major burger chain is closing 300 stores next year
The burger wars have always been fiercely fought, but the battle is even more challenging this year due to inflation and job losses. Prices are surging, and consumers are becoming increasingly cautious with their spending, particularly when it comes to dining out. Fast food restaurants, known in ...
The burger wars have always been fiercely fought, but the battle is even more challenging this year due to inflation and job losses. Prices are surging, and consumers are becoming increasingly cautious with their spending, particularly when it comes to dining out.
Fast food restaurants, known in the industry as quick-service restaurants (QSRs), have borne much of the brunt of the spending pullback. And burger chains have been particularly hard hit, including Wendy's, which has seen its U.S. foot traffic nosedive as consumers rethink their budgets.
Wendy’s at-a-glance
- Year Founded: 1969 (Columbus, Ohio).
- Locations (worldwide): 7,334, including ~6,000 in the U.S.
- Employees: ~225,000
- System-wide sales (2024): $14.5 billion, up 3.1% year over year.
Wendy's has never been viewed as the low-cost fast food option. Its decision to focus on quality, despite higher prices, was a deliberate choice that helped it carve out business from rivals McDonald's and Burger King. However, that niche is now working against it as it gets squeezed by casual dining restaurants, particularly Chili's, which are cutting prices to boost traffic and attract cost-conscious consumers -- eroding Wendy's moat.
It doesn't help matters that restaurants are facing heavy price increases.
"82% of those experiencing labor increases saw a 1% to 5% increase, while 15% experienced a 6% to 14% jump," reports Pizzamarketplace.com, citing Restaurant365's Midyear State of the Restaurant Industry. "Food cost increases also surpassed expectations, with 91% of respondents reporting a rise, up from the 82% who had expected increases at the start of the year. More than half of those coping with food cost inflation this year are seeing a 1% to 5% increase.
As a result, Wendy's sales are under pressure, and that's forcing it to make some tough decisions, including closing many of its locations in 2026.
Wendy's makes tough decision to close hundreds of stores
Chili's decision to cut prices on its burgers to attract more customers has blurred the lines between casual dining and fast food. Chili's "3 for me" deal even goes as far as to challenge McDonald's head-on in its marketing, saying on its website, "With two slices of American cheese, ketchup, mustard, pickles, sliced onions and 85% more beef than a Quarter Pounder with Cheese*. The Big QP really does make other burgers look tiny." Brandon Bell/Getty Images
The 3 for me deal gives customers an appetizer, beverage, and entree for as little as $10.99 -- a price that puts it within the ballpark of Wendy's Dave's Combo, which clocks in around $12 near me.
Lower-cost options at casual dining and generally higher prices for food away from home are taking a toll on Wendy's.
Food away from home inflation by year
- 2024: 4.1%
- 2023: 5.8%
- 2022: 7.7%
- 2021: 3.9%
- 2020: 3.4%
- Source: USDA Economic Research Service (ERS) using BLS CPI data.
"In the third quarter, global system-wide sales decreased 2.6% on a constant currency basis, primarily driven by a decline in U.S. same-restaurant sales of 4.7%, said Chief Accounting Officer Suzanne Thuerk on Wendy's third quarter earnings call. "The decline in U.S. same-restaurant sales was driven by a decrease in traffic."
Wendy's same-store visits by month (Q3 2025):
- September: -9.9%
- August: -4.3%
- July: -4.9%
Source: Placer.ai.
The company has initiated a thorough review of its business in response, including a comprehensive examination of underperforming locations.
"In terms of system optimization [store closures], based on the information we have today, I'd estimate around a mid-single-digit percentage of U.S. restaurants would end up closing," said CEO Cook on the call.
Wendy's declining foot traffic stands in stark contrast to Chili's, which saw a surge in foot traffic of 15.4% in the third quarter, according to Placer.ai.
More Restaurants: McDonald’s suffers major shift in customer trends
"Chili’s has emerged as a standout in full-service dining, delivering strong year-over-year (YoY) growth in both overall and same-store visits," wrote Placer.ai in October. "Chili’s, for one, continues to emphasize its 3 For Me value play and reinforce value perception."
Cook says Wendy's decision to close stores will improve same-store sales and profits over time, increasing foot traffic to other locations within the same market, and boosting efficiency. The store closures will begin in the fourth quarter and continue in 2026. Overall, Wendy's has roughly 6,000 U.S. locations, so a mid-single-digit percentage represents about 300 stores likely to close down in the coming year.
Related: Chick-fil-A sidesteps troubling customer trend hurting Wendy's
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