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Howard Penney, a restaurant analyst for Hedgeye Risk Management, said McDonald's return to the Dollar Menu "doesn't make sense" in terms of profitability at a time when beef prices continue to climb. But he noted that Wendy's needs to emphasize value to stay competitive. "They have to respond. They can't just ignore it," Penney said. Wendy's revamped approach also reflects the twin challenges facing traditional fast-food chains, which are scrambling to improve the reputation of their food even as they cater to budget-minded diners. As the popularity of chains such as Panera Bread Co. and Chipotle Mexican Grill Inc. have raised expectations for food quality, traditional fast-food chains have stepped up their offerings. Burger King made its French fries thicker and uses a different kind of bacon on its burgers. Taco Bell
-- known for its cheap eats -- introduced a line of Cantina Bell bowls last year intended to appeal to a slightly more upscale crowd. Wendy's, which is based in Dublin, Ohio, has in recent years introduced natural-cut French fries and premium offerings such as Dave's Hot
'N Juicy burger. Even as it touts its new value menu, Bahner says Wendy's won't let up on that premium front. For example, executives have said the chain will introduce new breads for its sandwiches, intended to improve perceptions about its food in the year ahead. Still, Bahner notes that value menus have long been an important staple in the fast-food industry. And given ongoing macroeconomic trends, he said that emphasis on value will remain critical for years to come.
[Associated
Press;
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