McD’s Sticking to Breakfast Schedule

Discussion
Nov 28, 2007

By George Anderson

Back in 1993, applause erupted in theaters across America as the chief character in the movie Falling Down (played by Michael Douglas) forced a fast food restaurant at gunpoint to make him a breakfast sandwich despite being two-minutes into the lunch menu portion of the day.

For as long as restaurants have set limits on what time breakfast items can be served, there have been consumers wishing it were otherwise. That is why so many ears perked up last year when McDonald’s CEO Jim Skinner said the company was looking at a system that would enable its restaurants to offer breakfast all day long.

Now it appears as though all day breakfast may be only a pipe dream.

Jan Fields, chief operating officer of McDonald’s USA, said earlier in the week that the company’s restaurants would be sticking to the current breakfast hours “not only in the near future but in the long-term future.”

She added, “Breakfast all day is certainly something we would always take under consideration, but it’s not going to happen for a long time.”

Janna Sampson, a chief investment officer with OakBrook Investments LLC, told Crain’s Chicago Business, “I suspect they have done tests and found they wouldn’t sell enough (breakfast items) to make it worth the cost.”

Breakfast accounts for roughly one-fourth of sales in McDonald’s restaurants across the U.S.

Discussion Question: Would you see any of the top fast food restaurant chains gaining a competitive point of difference and advantage by expanding breakfast hours? Which national chain would benefit most from expanding the hours in which it serves breakfast items?

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20 Comments on "McD’s Sticking to Breakfast Schedule"


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Dan Raftery
Guest
14 years 5 months ago

Cost may not be the real issue here. It is probably production. McD’s already has too much variety during any day-part to be considered a “fast food” outlet. I’m pretty sure they could make Egg McMuffins profitably at any time. I’m also pretty sure their production system would choke.

Carlos Arámbula
Guest
14 years 5 months ago

McDonald’s is the only national chain with a recognized breakfast menu and day-part specific loyal customers–those who only go to McDonald’s during breakfast hours. They stand to benefit the most from menu flexibility.

Breakfast can contribute as much as 60% of a store’s daily sales depending on location. And before McD’s introduced their lighter fare, along with the playgrounds, it was the only reason some adults visited the store.

On the West Coast, where the QSR battle is most fierce, Jack in the Box has been offering breakfast all day and has spent a substantial budget in promoting the offer.

Work scheduled demands for breakfast flexibility have always been there (haven’t diners always offered breakfast all day?), a flexible breakfast schedule is needed now because the consumer is more aware of his dietary options and QSRs have to evolve with the consumer.

Phillip T. Straniero
Guest
Phillip T. Straniero
14 years 5 months ago

I think the main reason that McDonald’s will (or other fast food chains) will not go to an all-day breakfast is that there is not a strong enough ROI in exchange for disrupting a food preparation process that works. If you consider the capital in terms of additional square footage and more equipment as well as added labor and training costs, it doesn’t appear to be a profitable move. Even though we are becoming a 24-7 service-based nation, the only reasonable option for an extended fast food breakfast might exist between 2 and 5 am–I for one am not a fan of burgers and fries in the wee hours but would stop in for an Egg McMuffin!

David Livingston
Guest
14 years 5 months ago

Personally, I would prefer McDonald’s just forget breakfast altogether and sell hamburgers all day long instead. I couldn’t care less about breakfast at 4 pm but sure would like to get a Big Mac at 7 am instead.

Li McClelland
Guest
Li McClelland
14 years 5 months ago

Customers choose fast food places because they are in a hurry and because of what they have a taste for that minute–most often one of the chain’s specialties–whether it be a quarter pounder, burrito, popcorn chicken, or chili. Each and every additional menu item and variation or combo offered, increases stress in the back kitchen, at the register, and for the customer.

I am horrified to see ever more food being tossed in the trash (in front of customers) due to incorrect orders being refused by the customer. Is it a language problem, too many computer buttons to push, too many irons on the fire, or something else? I don’t know.

Fast food places do not need MORE offerings which just duplicate other establishments. Rather, they need to train their staff to expertly prepare fewer things the chain is known for, and do them really fast.

James Tenser
Guest
14 years 5 months ago

As in any well-run business, McDonald’s has made a reasoned judgment about what it is good at, and elected to stick to its strengths. The McD’s store concept is fairly highly tuned, so changing procedures will have an impact on overall performance.

As in all optimization problems, there are trade-offs to be be considered–satisfy a small proportion of customers who want breakfast in the afternoon versus an increase in cost of operations or a slowdown in peak hour service.

Sol Price’s concept of “intelligent loss of sales” comes to mind here. Unfortunately, few businesses can be designed to delight all customers all the time. Positioning and communications help manage expectations.

Steven Carry
Guest
Steven Carry
14 years 5 months ago

Jack In The Box restaurants where I live have served breakfast for about five years at all hours that they are open.

The owner thinks it’s nonsense to not serve it all day.

Sid Raisch
Guest
Sid Raisch
14 years 5 months ago

There is an Arby’s in Wilmington, Ohio that serves a wider variety of menu items a wider variety of hours. It is located near DHL Express airport where there are a large number of shift workers. They have lines at the pickup window at all times.

I travel by air frequently and this incurs early morning trips to the airport in Columbus, Ohio. A couple of weeks ago I pulled into a McDonald’s in Washington Court House, Ohio a few minutes before 5 am. They were still on their late night menu which meant the only breakfast items were coffee and their cinnamon roll. Frustrating. The all day cinnamon roll may be McDonald’s foray into all day breakfast?

Art Williams
Guest
Art Williams
14 years 5 months ago

The fast food chain that starts this first should have an advantage. While I don’t know how many breakfast items are served outside normal breakfast hours, just the fact that you can probably helps business. It may be similar to the 24-hour operation situation. Stores that begin 24-hour operation do more business but not all the new business comes from the expanded hours but rather the hours just before they formerly closed. Apparently not having to guess what their hours are helps business. Would the same theory work with all-day breakfasts? I think it would help and give a competitive advantage.

J. Peter Deeb
Guest
14 years 5 months ago

This could be another example of the tail wagging the dog. Expanding breakfast by an extra hour might make sense but beyond that only strains the resources of an already tight labor pool and has potentially more downside (unhappy customers waiting for burgers while a breakfast item is prepared, etc).

Leave the breakfast sales after noon to the experts like Cracker Barrel and Denny’s!

Nikki Baird
Guest
Nikki Baird
14 years 5 months ago

I agree with the last comment–it’s all about how much you sell vs. how much it costs. To be able to serve eggs all day requires a separate, dedicated grill, which takes up space that does not exist in the back of a McD’s. However, with Starbucks getting into breakfast–and lunch–and McDonald’s trying to take some premium coffee business from them, there may be competitive forces at play in the industry that force McDonald’s and other fast food restaurants to rethink that equation–it may not be how much you sell vs. how much it costs. It may be more like “how much THEY sell vs. how much that costs you”….

David Biernbaum
Guest
14 years 5 months ago

Flexibility on menu selection is the right business model for today’s consumer lifestyles and demands.

Anne Howe
Guest
14 years 5 months ago

Breakfast any time is a very consumer friendly concept. I think it is best left to the Denny’s and the thousands of local “diners” and what we call the “Coney Island” restaurants. They are fast, affordable and good community retailers.

It is a pleasure to eat breakfast at lunch time or even better–late night at these local places. I say, let the fast food chains concentrate on what they are best at–time appropriate menus that deliver decent food in a hurry.

Mark Hunter
Guest
Mark Hunter
14 years 5 months ago

Breakfast and burgers don’t go well together. Attempting to serve breakfast throughout the day, along with burgers, is a recipe for failure. The strain on labor and resources is too great.

In 1976 I was the manager for the #2 volume McDonald’s in the world (Guam was #1) and my location, Fairbanks, AK, was #2. We attempted to serve breakfast and burgers both until 11 AM in an attempt to catch Guam. It failed–we never caught Guam. After it was over, we realized we had hurt our lunch business which reduced our overall sales because quality and service both were less than optimal.

Mark Lilien
Guest
14 years 5 months ago

Breakfast, when it includes coffee, has great margins because coffee has great margins. But breakfast often has lower price points than other meals. Restaurants have to maximize gross margin dollars. Sooner or later, Burger King or Wendy’s or McDonald’s or Jack In The Box will start selling breakfast all day, and the others will follow as a competitive response.

Warren Thayer
Guest
14 years 5 months ago

I’m assuming all these companies have crunched the numbers, and decided their free capital is better focused on other things that turn a better profit. I’d love to see a chain of restaurants called “Breakfast,” since I love those roadside greasy spoons that offer breakfast all the time. But actually, I suspect a “Breakfast” chain would fail, probably because many of us like breakfast at 3 pm “once in awhile” and not more often than that. But a chain called “The Greasy Spoon,” well, I think that one could be a winner in America today, despite protestations about fat, cholesterol, organic and all those wonderful things. You heard it here first!

Dick Seesel
Guest
14 years 5 months ago

I’m not sure McDonald’s could conduct a fair test of this idea without picking a market and advertising the idea. They might find out there is in fact a business in breakfast items 24 hours a day. Certainly chains like Cracker Barrel and Perkins have built a business this way, and probably drive a healthy percentage of their sales with breakfast items at dinnertime. The bigger challenge to McDonald’s is the logistics of handling more categories (even a small selection of their best-selling breakfast sandwiches) in a limited space that is always being usurped by other new menu items. But there is little doubt that today’s world and workforce is changing its working, eating and sleeping habits at a rapid pace.

Suzy Badaracco
Guest
Suzy Badaracco
14 years 5 months ago

I think this is a huge mistake–someone else will do this, you can bet on it. But then, McD’s has always said they have no intention on leading the trends but translating them for the masses, so I bet they’ll eventually do this. They will miss the boat if they don’t.

Odonna Mathews
Guest
Odonna Mathews
14 years 5 months ago

Consumers like breakfast when they want it, no matter what time of day (or night). Perhaps if McDonald’s offered a more limited breakfast menu throughout the day, that would make it more profitable and offer consumers more choices.

I do think there should be a greater variety of healthful choices for breakfast besides just pancakes. Surely McDonald’s can do that!

Evan Schuman
Guest
Evan Schuman
14 years 5 months ago
The McDonald’s breakfast debate is interesting, but in today’s market, we have to remember that McDonald’s isn’t about hamburgers or poached egg sandwiches any more than Starbucks is about coffee or Nordstrom’s is about shirts. The destination/environment issues are crucial. People go to Nordstrom because they want to be treated well (and get shirts) and they go to Starbucks to socialize with colleagues or friends (and get coffee). McDonald’s is about convenience and value. Consumers go in when they’re tight on time and when they don’t have a lot of money to spend. Viewed in that context, extending the breakfast hours makes a lot of sense. As others here have noted, making it 24 hours is not only disruptive but is probably not necessary. I doubt they’d sell a lot of Egg McMuffins at 6 PM. But after midnight? Very possibly. That said, offering it from Midnight to Noon (there are a lot of 24-hour McDonald’s) would probably cause almost as much of a disruption as making it 24 hours, but it would relieve the… Read more »
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