News
Breakfast daypart suffers as consumers cut spending
March 14, 2010
Quick-service restaurants have recognized the potential of the breakfast market, contributing to a record-breaking year in 2009 for new product introductions for the daypart, according to a report from market intelligence firm Mintel. The firm reports that restaurants added more than 460 new breakfast items to their menus in 2009, more than in 2007 or 2008, respectively.
Notable QSR breakfast item introductions in 2009 include McDonald's launch of the McCafé espresso-based beverageline, intended to boost not only breakfast sales but grab a piece of the huge beverage market. Other brands have improved their coffee, including Hardee's and Chick-fil-A, and Burger King announced it will be switching to Seattle's Best Coffee later this year.
On the food side, Burger King is strengthening its breakfast menu with an English muffin sandwich due to launch on the value menu this spring. Taco Bell also is testing the addition of breakfast, and Wendy's is retooling its breakfast menu.
But the opportunity in the daypart has become limited due to high unemployment and other economic factors that have impacted the QSR industry, including the breakfast daypart. Half of consumers surveyed by Mintel in November 2009 said they're spending less on restaurant breakfasts compared to 2008. Only one in 10 are spending more. Furthermore, nearly half of survey respondents said they don't eat breakfast out during the week (47%) or weekend (45%).
"We see an increasingly competitive market for restaurant breakfast, even though sales have declined," said Eric Giandelone, director of research, Mintel Foodservice, in a news release. "Restaurants are refreshing their breakfast menus, but I believe reduced consumer spending, as well as relatively high unemployment, will limit sales growth over the next year."
Restaurant breakfast and brunch sales fell 3.4 percent from 2007 to 2009, according to Mintel. The category is expected to grow only modestly through 2011 before picking up speed. All told, Mintel forecasts the breakfast foodservice market will expand by 13 percent from 2009 to 2014.
"To overcome contracting sales, restaurant operators need to be keenly aware of what drives people into restaurants for breakfast," states Eric Giandelone. For example, Mintel found people are mostly looking for low prices and convenience on weekdays, while food quality and menu variety are more important to weekend breakfast diners.
"Restaurant operators can also perk up sales by realizing that many diners crave breakfast outside traditional breakfast hours," Giandelone said. The top thing breakfast diners told Mintel they'd like to see more of at restaurants was "all-day breakfast" (36% weekday, 38% weekend).
Consumers also desire more breakfast value meals (32%), and QSRs are reponding. McDonald's launched a national breakfast value menu in late 2009, and Burger King plans to expand its breakfast value menu this year.
Related Media
Subscribe
Get the latest news and resources from QSR Web.
