According to the CEO of fast food restaurant chain Wendy’s (NASDAQ:WEN), consumer spending is “challenging.”
His remark comes just weeks after Target CEO Brian Cornell, who has three decades of experience in retail, said that consumer spending has never been better.
Wendy’s CEO Todd Penegor has said that many Wendy’s customers are still struggling despite stronger economic growth and low unemployment.
He explained that lower-income diners “are not participating in the real wage growth to the extent of the rest of the consumer base.”
The CEO thinks that many customers who dine frequently at his company’s restaurants are struggling, even though there is stronger economic growth and low unemployment.
Penegor told CNBC, “It’s still be a bit challenging … [because] about 40 percent of our consumers are $45,000 and under from an income bracket. And they’re not participating in the real wage growth to the extent of the rest of the consumer base.”
Target CEO Brian Cornell said in August that Target is “benefiting from a very strong consumer environment.” He even went as far as to say that it may be “the strongest I’ve seen in my career.”
You need a compelling offer’ to get people in Wendy’s restaurants, said Penegor.
“You need a compelling offer: fast, convenient and affordable. But people are looking for quality too and we can deliver that with all of our fresh-cut vegetables in the restaurant everyday and our fresh beef,” Penegor said on “Squawk Box.”
“We’ve been fresh on every hamburger at every restaurant since 1969. It validated that fresh does taste better,” he added.
“What we’re seeing on delivery is our highest-rated overall satisfaction. So convenience trumps everything. Our average check is one and a half to two times more than the average check in the restaurant,” he said. “We’re seeing a new tail wind today. It’s still small in the spirit of our same-restaurant sales.”