Breakfast for a dollar: will McDonald's win the battle of the a.m.?

Posted Dec 21st 2006 10:35PM by Sarah Gilbert
Filed under: Products and Services, Competitive Strategy, Starbucks (SBUX), McDonald's (MCD), Wendy's Intl (WEN), Burger King Hldgs (BKC)

In the war for cheap eats, breakfast is about to become the front line. McDonald's Corporation (NYSE:MCD) is about to roll out a dollar menu for morning staples like the sausage muffin with cheese and a breakfast burrito with two hash browns. Burger King Holdings, Inc. (NYSE:BKC) won't be far behind and is expected to have 10 items for a dollar on its breakfast menu this spring. (No word, though, on when and whether these items will be available all day long.)

If you're a believer in fast food, believe that Wendy's International (NYSE:WEN), whose value menu is legendary for its variety, will be jumping on this bandwagon soon. Already the breakfast market seems to be the Mealtime to Be of 2007, what with Starbucks Corporation (NASDAQ:SBUX) hoping to complete its rollout of eggy cheesy breakfast sandwiches by mid-2007, and, according to the Motley Fool, the news that Yum Brands' (NYSE:YUM) Taco Bell is also exploring a breakfast menu.

Who will reign supreme? How will this effect the companies' respective bottom lines? Neither McDonald's nor Burger King breaks out revenue by mealtime or menu item, so it's hard to say what percentage breakfast is of the overall sales. It's equally hard to predict how this would affect profitability -- certainly, it could diminish franchisee profits somewhat, but it's likely to increase overall sales. Breakfast is the mealtime of the future for fast food, and although McDonald's leads the way in the consumer's mind, with so many possible entrants into the $1 breakfast, it's anybody's game.

Tags: breakfast, breakfast sandwich, BreakfastSandwich, burger king, BurgerKing, egg mcmuffin, EggMcmuffin, fast, fast food, FastFood, food, mcd, mcdonald's, mcmuffin, sausage mcmuffin, SausageMcmuffin, sbux, starbucks, taco bell, TacoBell, value, value menu, ValueMenu, wen, wendy's, yum

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Reader Comments (Page 1 of 1)

12-21-2006 @ 11:55PM

spunky said...

Well, WHILE mcd is lowering their prices I saw again today 15 cars in the street waiting to order from IN AND OUT BURGER. How does a company and the owners make money on a buck. I wonder sometimes what kind of meat is in their hamburgers. Yes, I am a shareholder. Wish they would make a sirlon hamburger --I want quality not quanity.,

12-22-2006 @ 8:27AM

Vineyards975 said...

It would be nice to get a burger for breakfast, who made the rule "NO BURGERS TILL 10:30"

12-22-2006 @ 8:27PM

Larry S Kaplan said...

I hope McDonald's does not enter the breakfast products price war. Their products are already value priced and as reader post # 1 states, it is a challange to earn a profit selling a double cheeseburger for $1. As a society we want the businesses who offer products we like to make a profit. Otherwise, the business will fold. On the other hand, the $1 menu does provide a part of society the choice to enjoy McDonald's high quality products at a reasonable price. McDonald's probably hopes that people who might come in for a $1 menu item will trade up after seeing a product on the regular menu that interests them. And, for your information, the products on the dollar menu are not comprimised nor are they a cheeper variety. The dollar double cheese patty is the same patty that is used to make the Big Mac. As far as serving breakfast all day, McDOnald's does not have the capacity to simultaneously cook meat, chicken, and eggs without compromising food safety, something McDOnald's won't do. As far as the 10:30 cut-off point, some stores do offer breakfast and lunch concurrently for a short time. If you arrive right at the 10:30 window period, all you need to do is let a manager know what you would like to order and the manager will do everything in his/her power to sell you the food you want. I hope this has been helpful.

1-10-2007 @ 3:35PM

Ed said...

McDonalds has already lost me for breakfast because I cannot get a Sausage/Egg McMuffin after 10:30 AM. I can go to Jack-In-The-Box all day and get a Breakfast Jack. MCDONALDS: EXTEND YOUR HOURS SO WE CAN BUY THE MCMUFFINS ALL DAY!