Wendy's Overtakes Burger King to Grab Number 2 Spot

While McDonald's

continues to reign supreme at the top of the pile, the fast food industry was still significantly shaken on Monday when it was revealed that Wendy's

has knocked Burger King

off the number 2 spot. According to the

, a report by food research company Technomic that will be released in April shows that Wendy's knocked Burger King to one side in U.S. sales volume for the first time since WEN was founded in 1969. To put things into perspective, that is much like a company knocking Pepsi

off the number two cola spot. There are some companies that we just expect to be ranked in a certain position. Wendy's should be commended for finally disrupting that train of thought. The advantage is a small one, but it is still significant. 2011 saw Wendy's have sales of $8.5 billion, while Burger King had $8.4 billion. McDonald's still looks down on them with a staggering $34.2 billion. Both Wendy's and Burger King have struggled in recent years and continue to struggle to have any sort of impact on McDonald's numbers. But sales are up 26% in the past five years at MCD, up 9% at Wendy's and remain the same at Burger King. It seems incredible still that McDonald's sales are four times those of Wendy's and Burger King, or twice the combined amount of those two chains. It would seem that, no matter how well Wendy's does, that clown will just keep laughing from his red and yellow pedestal. On March 12, Deutsche Bank said in a research report that MCD posted another strong headline SSS result for Feb (+7.5%), the 4th month in a row above 6% globally. However, Feb missed DB and consensus due to softness in Europe and APMEA. “MCD also took the rare step of “talking down” earnings for the current qtr, with limited explanation. Nonetheless, we maintain a Buy as recent stock perf. already reflects some of this bad news, and MCD's industry-leading assets should continue to drive solid SSS.” On March 4, Goldman Sachs was far less positive about Wendy's, saying that WEN reported adjusted 4Q11 EPS of $0.04, in line with the preliminary results it released ahead of its January analyst day. “CEO Emil Brolick stated that the coming years will be “the most intense period of change in the history of the Wendy's brand” and “the three most intense years of capital investment in Wendy's history.” We agree there will be change and that it will be expensive, but despite our respect for Brolick, do not see evidence that it will drive an improvement in results.”