Fast Food Chains Struggle with Breakfast

As fewer people are commuting to work in the morning, most fast food chains haven’t experienced much luck with breakfast during the coronavirus pandemic.

McDonald’s is seeing same-store sales improvement, but the company said breakfast was a weakspot, reported MarketWatch (June 18).

“McDonald’s has the disadvantage of a high breakfast mix, which is currently the weakest daypart in the industry (aside from late night), due to fewer commuters,” wrote SunTrust Robinson Humphrey analysts.

The chain plans to keep dozens of items off U.S. menus for the foreseeable future, including breakfast items like bagels, reported The Wall Street Journal (June 18). After around 100 items were removed from menus when the pandemic hit, drive-thru times fell by an average of 25 seconds with customers indicating that their food was better and their orders were more accurate.

“Our menu strategy really has been focused as a result of COVID and the success we’ve had with a limited menu,” McDonald’s U.S. president Joe Erlinger said.

McDonald’s expected breakfast would be the segment of the day hit the hardest, so there was a pullback in marketing, according to CEO Chris Kempczinski. Now, the company is committing $200 million to global advertising to aid with recovery.

The company said the pandemic led it to undertake a menu review that it originally planned to perform by 2023. “We heard overwhelmingly the need to simplify our menu,” commented Morgan Flatley, McDonald’s CMO for the U.S.

Additionally, McDonald’s plans to hire 260,000 workers in the U.S. this summer, reported CNBC (June 18).

Another chain that struggled with breakfast is Taco Bell. Parent company Yum! Brands said in a business update that both the breakfast and late-night business were hurt by coronavirus.

Wendy’s, on the other hand, experienced a year-over-year increase in breakfast-time traffic. The chain rolled out breakfast the first week of March 2020, reported Business Insider (May 6).

“It’s clear that Wendy’s new breakfast menu is driving traffic and intrigue, even during a time of uncertainty,” said in a blog post. “This is a very strong sign for their revitalized breakfast menu and could position the brand for a post-COVID surge.”

In a call with investors, Wendy’s executives said breakfast now makes up 8% of its total sales. Breakfast’s immediate popularity helped boost same-store sales to 16% the week it launched.

“While the environment we encountered when we started breakfast was not what anyone would have expected, the strength of our program makes this daypart a key bright spot for us,” CEO Todd Penegor said.

During the pandemic, the chain reworked its breakfast strategy, cutting marketing and reducing the number of employees on the morning shift, and as a result, the company said the breakfast business is already profitable.

With a 154% increase of to-go breakfast, according to a Tastewise’s June 2020 breakfast trends report, it is clear consumers typically value the option of starting their day on the move. However, fast food offerings often miss nutritious breakfast demands, creating an opportunity for healthy to-go orientated restaurants.