Starting the Day the Homemade Way
Breakfast may be a lifestyle issue. For those perennially rushing from pillar to post, there is no time to prepare, let alone eat, a meal that is widely recognized as helping to get the day off to a good start. As a result, fast food restaurants have proved obliging, with quick, convenient and inexpensive choices virtually thrust into the hands of willing customers.
Claiming that the business is now worth some $57 billion and accounts "for as much as a quarter of sales at some fast-food chains," The Washington Post described the growth of breakfast offerings as both "explosive" and "extremely profitable."
Barclays Capital analyst Jeffrey Bernstein estimates that McDonald's breakfast sales account for about a quarter of its revenue but 35 percent of its profit.
NPD reportedly found that "in the five years before the recession hit, breakfast sales jumped 64 percent ... making it one of the fastest-growing sectors in the industry." But examples of recent declines at Burger King, McDonald's, 7-Eleven and Wendy were cited as evidence of economic concerns.
Kathy Hasty, senior director of hot foods at 7-Eleven, said breakfast at her chain traditionally held up well during recessions, but blames high levels of unemployment for current low sales levels. "We have never seen it as significant as it is now," she said.
Mr. Bernstein noted the effects of the recession on restaurants, claiming, "There is a direct correlation between unemployment and breakfast sales." This may be true for grocers as well.
The decline isn't all due to unemployment, however. Much has been written and said about a renewed preference for eating at home as a means of saving money even for those who still have jobs. Phil Lempert of Supermarket Guru suggests grocery stores can be proactive by advertising breakfast ingredients in their regular circulars, running themed promotions and reinforcing health benefits through educational materials in-store and on websites.
It may not be much consolation for those spending their mornings at home involuntarily, but grocers have a new opportunity for tempting consumers into turning their hands to morning meal preparation.
Discussion questions: Do you agree the downturn has increased the at-home breakfast opportunity for grocery stores? What can foodservice operators do to regain lost breakfast customers?