The battle for the breakfast daypart has intensified. While Americans choose to opt for a hearty breakfast, they want it to be convenient as well. This explains the demand for on-the-go options and quick-service and fast-casual restaurants are ready to capitalize on this.
Per market researcher Technomic, breakfast sales at fast-food chains have increased 4.8% on an annual basis from 2007 to 2012, outpacing the growth of lunch and dinner sales. Consequently, a number of fast food restaurants have launched breakfast dayparts over the past few years while others are busy adding new items.
What’s in Demand?
Forget the traditional toast and cereals. Burgers have been available as a breakfast item for years. However, sandwiches have become popular lately apart from coffee. The breakfast sandwich has bread, eggs, cheese and meat such as bacon or sausage. Not only do these satisfy the hunger pangs and fulfill the nutritional requirements but are also convenient to eat while on the move.
What’s on Offer?
We believe that fast food chains are geared up well to meet the demand for this daypart and thereby boost their sales and profits. Therefore, the food chains are leaving no stone unturned to dish out an interesting and unique menu.
The list of fast food chains competing to make the most of the demand for breakfast includes McDonald's Corp. (MCD), Dunkin' Brands Group, Inc. (DNKN), Yum! Brands, Inc. (YUM), Jack in the Box Inc. (JACK) and Starbucks Corporation (SBUX). While Dunkin' Brands is focusing on speedier restaurant operations as well as continued menu innovation, Starbucks revamped its breakfast sandwiches and other food offerings in Mar 2014, which boosted sales at this coffee chain. McDonald’s launched McGriddles and also offered free coffee during breakfast hours in Mar-Apr 2014. Taco Bell, a unit of Yum! Brands, began offering breakfast in 2014. Jack in the Box, meanwhile, has been offering breakfast for more than 20 years and benefiting from the same.
Other players in the industry that have capitalized on the demand for breakfast include Sonic Corp. (SONC), Cracker Barrel Old Country Store, Inc. (CBRL) and Denny's Corporation (DENN).
To Sum Up
Breakfast generally has lower food cost requirements for restaurants. Therefore, focusing on this daypart would help them to partially offset the adverse impacts of rising food costs.
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