Wendy’s Says Hamburgers Are in Short Supply at Some Locations

(Bloomberg) -- Wendy's Co., the fast-food chain that touts its burgers as fresh and never frozen, said that tight meat supplies are causing intermittent shortages of menu items at its restaurants.

“Beef suppliers across North America are currently facing production challenges,” the company said in an email. “Because of this, some of our menu items may be in short supply from time to time at some restaurants in this current environment.”

Wendy's is making hamburger deliveries two to three times a week to restaurants and is working with suppliers to monitor the situation. The company said it's trying to minimize the impact on restaurants and customers.

Customers have taken to social media to flag the lack of burgers -- the chain's signature item -- on Wendy's menus at some locations. About 18% of Wendy's restaurants were “completely sold out of beef items as of Monday evening,” Stephens analyst James Rutherford said in a research note, citing his company's data analysis, which reviewed the online menu of every Wendy's nationwide.

North America's meat-supply chain has fallen apart as coroanvirus outbreaks shutter slaughterhouses, heightening the prospect that pork, beef and chicken may go missing from grocery shelves and restaurant menus. About a dozen slaughterhouses shut last month because of infections among employees jammed together on processing lines.

Wendy's shares fell 3.1% to $18.68 at 10:38 a.m. in New York. The stock has dropped about 16% in 2020. The company is scheduled to report first-quarter results tomorrow morning before the start of trading.

Vulnerable Supply

The company spent years establishing itself as the first major fast-food chain to offer fresh-never-frozen beef. Rivals such as McDonald's Corp. have followed suit. It's a shift that has left some companies more vulnerable to disruptions to America's beef supply chain than ones that still rely on imports from Australia and other countries.

Rutherford said that some states have full menus at all locations while some, like Ohio, Michigan, Tennessee, Connecticut and New York, have 30% or more of restaurants without fresh beef on the menu.

Wendy's is more exposed to the shortage than other fast-food chains because of its focus on fresh beef, but “a short outage is not material” and there could be a quick improvement in supply, Rutherford said. Sales trends at Wendy's have been strong in recent weeks, he added.