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Wendy's Turnaround Push Starts To Take Hold

CANDICE CHOI

NEW YORK (AP) â¿¿ The Wendy's Co.'s push to transform itself as a higher-end hamburger chain is showing early signs of taking hold.

The Dublin, Ohio-based fast food company says a key sales figure rose 3.2 percent in the second quarter, helped by renovated restaurants, new menu items such the Spicy Guacamole Chicken Club sandwich and a new TV ad campaign.

Sales at restaurants open at least 15 months is a key gauge because it strips out the impact of newly opened and closed locations.

Wendy's said the boost was driven by increased spending per visit, which is in line with its long-term goal of enticing customers to pay more for higher-quality food. But executives noted in a conference call with investors that the company still has a long road ahead. The turnaround efforts also come at a time when competition is intensifying and the economy remains weak.

To cast itself as a more premium fast-food chain, Wendy's is investing heavily to give its restaurants a fresher look. By the end of 2015, half of its company-owned locations will be remodeled with an airy new style that features leather chairs, flat-screen TVs and metallic highlights.

CEO Emil Brolick said the renovations and newly built restaurants â¿¿ which will cost $80 million this year â¿¿ are critical because they "enhance all dimensions of the Wendy's experience." He noted that restaurants that were renovated last year enjoyed a 25 percent increase in sales.

To justify its higher prices and build loyalty, Wendy's is also working to improve customer service. Additionally, Brolick noted the chain will need to offer a steady pipeline of compelling limited-time offers to keep customers coming back.

After years of lackluster sales and eroding market share, Wendy's hired Brolick last September and has since been on a mission to revive its business. The push hit an early snag in the first quarter, when the company said its "You Know When It's Real" marketing didn't resonate as strongly as its competitors and sales came in weaker than expected. The company vowed at the time to make adjustments.

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