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Burger King loses No. 2 sales crown to Wendy’s

- Associated Press - Monday, March 19, 2012

NEW YORK — Wendy's has dethroned Burger King as the country's second-biggest hamburger chain.

Wendy's edged out Burger King in U.S. sales volume for the first time last year since Wendy's was founded in 1969, according to a report by the food industry research firm Technomic Inc. that is set to be released next month.

Wendy's had sales of $8.5 billion in 2011, compared with $8.4 billion for Burger King. McDonald's remained far larger than both with $34.2 billion in sales.

The figures are based on Technomic's estimates of systemwide sales at franchise and company-owned restaurants, rather than corporate revenue, which includes fees from franchise operators. Worldwide, Burger King still has far more restaurants than Wendy's and remains the second-biggest hamburger chain behind McDonald's.

Both Burger King and Wendy's have struggled in recent years to keep up with the growth of McDonald's, which has managed to keep prices low through the recession, while introducing new menu items and remodeling restaurants. Sales are up 26 percent in the past five years at McDonald's, up 9 percent at Wendy's and flat at Burger King, according to Technomic.

Burger King has been re-evaluating its business since it was acquired by investment firm 3G Capital in 2010. The privately held company, based in Miami, retired the restaurant chain's mascot "The King" last year and launched an advertising campaign focused more on food.

Despite its edge over Burger King, Wendy's also been on a mission to reinvent itself as a higher-end hamburger chain with items such as the Dave's Hot 'N Juicy burger introduced last fall.

CEO Emil Brolick blamed the Dublin, Ohio-based company's poor performance in recent years on "self-inflicted wounds." He laid out plans this year to raise standards for employees and update stores with an airier, more modern look.

The sales rankings for the top five restaurant chains have undergone another dramatic shift in the past five years, according to Technomic. In 2006, the No. 2 and No. 3 spots were held by Burger King and Wendy's respectively, making the top three companies all hamburger chains.

Subway now is No. 2 with $11.4 billion in sales last year, and Starbucks is No. 3 with $9.8 billion. U.S. sales at both companies have grown at much faster rates than the top three hamburger chains, with Subway sales up 48 percent from five years ago and Starbucks sales up 39 percent.

The final Technomic report with sales for the top 500 restaurant chains is set to be released April 13.

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