Retailer Daily

Breakfast Menus Heat Up in 2009

U.S. restaurants added more than 460 new breakfast items to their menus in 2009, according to new figures from market research firm Mintel. This is more items than were added in 2007 or 2008.

Consumer Breakfast Interest Cools

Despite restaurant retailers’ increasing emphasis on breakfast, consumers appear to be losing interest in what is often termed the “most important meal of the day.” In November 2009, 50% of U.S. consumers said they are spending less on breakfast in restaurants than they did in 2008. In addition, restaurant breakfast and brunch sales fell 3.4% from 2007 to 2009, according to Mintel. The category is expected to grow only modestly through 2011 before picking up speed. “We see an increasingly competitive market for restaurant breakfast, even though sales have declined,” said Eric Giandelone, director of research, Mintel Foodservice. “Restaurants are refreshing their breakfast menus, but reduced consumer spending, as well as relatively high unemployment, will limit sales growth during the next year.”

Long-term Breakfast Potential is Solid

All told, Mintel forecasts the breakfast foodservice market will expand by 13% from 2009 to 2014. Research indicates that one way restaurants can improve sales of their breakfast menu items is to offer them outside traditional morning hours. Thirty-six percent of consumers want to see breakfast served all day during the week, and 38% want all-day breakfast on the weekend. Another 32% want more breakfast value items on restaurant menus.

Chains Target Breakfast Sales

Several major foodservice chains have piloted or introduced new breakfast menu items in the past year. In addition to revamping its coffee offering, Chick-Fil-A introduced a new low-fat yogurt parfait breakfast item in January 2010. Fast food chain Taco Bell is reportedly expanding a 2009 breakfast menu pilot this year. Taco Bell has been offering a breakfast menu at 13 stores in the Tuscon, AZ market. Items include a breakfast burrito for 89 cents, as well as products from other retailers including Seattle’s Best coffee, Jimmy Dean sausages and Cinnabon pastries. Fast food retailer McDonald’s has been making a heavy play for breakfast customers in the past year. McDonald’s reportedly hopes to price some breakfast items at $1 during the first half of 2010. According to Dow Jones, an internal McDonald’s document indicates the chain has already approved a national advertising campaign and will let regional advertising groups vote on the idea. McDonald’s, which declined comment on the document, has previously credited its breakfast menu for improving its fiscal 2008 results. The retailer began opening some stores an hour earlier last year to attract more customers. Breakfast constitutes about 25% of the company’s sales and 40% of its profit. Meanwhile, Starbucks and Dunkin’ Donuts have also been busy introducing budget breakfast items. In March 2009, Starbucks launched a new breakfast pairings menu featuring a selection of coffee and breakfast item pairings for $3.95 plus tax where applicable. And in June 2009, Dunkin’ Donuts ran a limited-time promotion of $0.99 breakfast sandwiches called “Wake-up Wraps.” More recently, Dunkin’ Donuts began offering all breakfast sandwiches and wraps with egg whites at participating stores across the U.S. Dunkin’ Donuts is also introducing a low-fat cranberry orange muffin with three grams of fat.