Wendy's Moves to Premium Pricing

Wendy's is moving to some premium pricing, but will it be able to drive the same profit it did in the second quarter?
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) -- Are burger prices a bellwether of the economy? If so, then the recent announcement by


(WEN) - Get Report

and other fast-food retailers that they are returning to premium pricing might well augur the end of the worst times.

The recession has, of course, led most fast-food chains to slash prices and promote value menus and products. But judging by the recent news from the company, that

pricing war

could be coming to an end.

The fast-food chain plans to launch a premium bacon cheeseburger at Wendy's in October in an effort to compete with


(MCD) - Get Report

new Angus burgers.

Drive-thru chain



also said last month that it plans to shift its focus from affordability to promoting "the chain's unique, high-quality, differentiated merchandise," CEO Steve Vaughan said at Oppenheimer's Consumer, Gaming, Lodging & Leisure Conference in Boston.

Read: We won't just be pushing the cheap stuff anymore.

As Wendy's CEO Roland Smith told investors during a conference call: "Value is relative, and I don't think all value is defined by $1 price points,"

Regardless, it does appear that discounting has been working quite well for Wendy's. During the second quarter, the company earned $14.9 million, or 3 cents a share. During the same period last year, Triac -- the owner of Arby's, which acquired Wendy's in September 2008 -- lost $6.9 million, or 7 cents.

Analysts expected earnings of 3 cents a share.

Revenue was $912.7 million, nearly triple Triac's revenue last year, while same-store sales fell 0.4%.

Shares of the company jumped 4% to $5.27 in morning trading.

-- Reported by Jeanine Poggi in New York.

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