Quarantine Could Crown a Winner in the Fast Food Breakfast Wars
Unless you’d penciled in 2020 as the year you never leave your house, the COVID-19 pandemic thrown a wrench in pretty much everyone’s plans. In the fast food industry, many of those plans revolved around breakfast. Last fall (aka, a million years ago), Wendy’s announced it would offer breakfast nationwide, adding a chicken sandwich twist by making a Honey Butter Chicken Biscuit one of the signature items. McDonald’s countered with its own Chicken McGriddles while Dunkin’ leaned into the plant-based meat trend taking a Beyond Sausage Sandwich nationwide. In all, 2020 looked to be the year fast food brands battled over breakfast.
But once the pandemic struck, many people’s commutes got axed, and though—as a natural to-go option—fast food sales have been hanging on despite coronavirus, breakfast has reportedly taken a significant hit.
During an earnings call last week, McDonald’s admitted its mornings were not particularly sunny. “Breakfast continues to be disproportionately impacted by disruptions to commuting routines,” Chief Financial Officer Kevin Ozan explained, later adding, “The overall breakfast market is declining.”
Key coffee brands like Starbucks and Dunkin’ are also seeing changes in people’s behavior. During Dunkin’s recent earnings call, President Scott Murphy explained, “Since the onset of the COVID pandemic, changes in guest routines shifted sales from early morning to mid-day, particularly 11:00 a.m. to 2:00 p.m.” And last week, on Starbucks’ call, Chief Operating Officer Rosalind Brewer said the chain has “seen a shift in the customer in terms of how they view their morning,” with the first peak arriving later at “mid-morning.”
Speaking with Business Insider, Niren Chaudhary—CEO of Panera—had a similar sentiment: “If anything, we're seeing the consumption of coffee starting later in the morning than it used to, and kind of extend more through the day than it has done in the past.” This change is especially notable for the bread chain since Panera launched an unlimited coffee subscription service back in February in large part because it helped sell more food. COVID-19 may have caused that plan to backfire: “There's not much recovery in the breakfast daypart right now. In terms of daypart, breakfast has dried up,” Chaudhary added.
But just because breakfast sales have been hammered doesn’t mean the major players want out of the game. The opposite effect is possible: Companies fighting harder to keep their portion of a smaller pie. “[Breakfast], prior to the pandemic was the only daypart that was growing, and so as a result, there were a lot of new competitors that were flooding into the breakfast daypart,” McDonald’s CEO Chis Kempczinski stated last week. “If you look at how we've performed through the pandemic, even though breakfast is certainly in the U.S. still the most challenged daypart, we're actually growing our breakfast share. And so, while it is a drag from an overall standpoint, we're gaining share at breakfast, and I know [everyone is] hopeful to continue that trend.”
Wendy’s—the company that fired the biggest shot in this war—will announce its earnings this Wednesday. Burger King’s parent company Restaurant Brands International follows the next day. So by the end of the week, we should really know whether fast food breakfast is at its breaking point.