Here are the winners and losers of fast food for breakfast

November 14, 2020 Business



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Because so many people stayed home for breakfast and morning coffee, Taco Bell, Starbucks, and Tim Horton suffered. However, with the passage of time, there have been some signs of a comeback, mainly from McDonald’s and Wendy’s.

Here’s who wins and who loses at breakfast based on a recent streak of earnings:

McDonald’s (MCD) saw an increase in sales in stores that have been open for at least a year for September and October for all daytime parties, including mornings. This is a reversal after several months of breakfast dips, even before the pandemic.

While it didn’t launch anything new in the morning during the third quarter, the recovery was supported by stronger sales throughout the day. McDonald’s added celebrity meals and new flavors of chicken nuggets, which helped U.S. sales in stores that have been open for at least a year grow 4.6%.

Looking ahead, McDonald’s is focusing more on its McCafé line with new pastries and selling “hotter, faster and fresher coffee more consistently” which has “huge growth potential,” it said at a recent meeting of the investors. However, plans to bring back All Day Breakfast have not been announced.

Winner: Wendy’s

Breakfast is still booming for Wendy’s. The meal, launched just days before the pandemic hit the United States, accounted for 7% of sales in the third quarter. While it’s a slight decrease from the previous quarter, it remains a success story for Wendy’s.

The meal is “delivering a level of sales and profits that we did not previously have,” noted CEO Todd Penegor in a November 4 earnings call. “We’re also seeing our customer satisfaction scores to be our highest in the breakfast time slot, as customers love the offer we have.”

In particular, critics feared that the breakfast launch would cannibalize its lunch and dinner sales. This is not the case, with Penegor stating that “the message about the quality food we provide for breakfast comes back to support the rest of our day”.

Wendy’s (WEN) he said he is continuing to grow breakfast with more advertising and promotions.

Loser: Starbucks

No chains were broken by the sudden change in morning routines Starbucks (SBUX). Sales in the United States in the last quarter in stores that have been open for at least a year fell by 9%. It got better in September, when sales in stores that had been open for at least a year only dropped 4% due to the return of Pumpkin Spice Lattes.
However, the chain is optimistic for a recovery next year when it expects sales in stores that have been open for at least a year to jump between 17% and 22%. Suburban and drive-thru locations are recovering faster than city locations.

Loser: Taco Bell

Sales of breakfast, which historically represented 6% of Taco Bell’s sales, fell to 4% for the third quarter. This is the result of a significant portion of its US restaurants having stopped selling it during the pandemic.

Yum! Marche (YUM) Chief Executive David Gibbs said in his Oct.30 earnings call that he is “committed to having breakfast for the long term and expects to return to doing so with all stores as time goes on.”

Despite this, quarterly sales in stores that have been open for at least a year have grown by 3%.

Loser: Tim Hortons and Burger King

Both chains, owned by Restaurant Brands International (QSR), had a sad third trimester. At Burger King, U.S. sales in stores that have been open for at least a year dropped 8%, in part due to its breakfast offerings.

CEO Jose Cil said that “the disruption of the pandemic in morning routines and mobility contributed to our softer performance in the morning hours,” in an earnings call. He added there “clear areas for improvement in our breakfast offering” and will be implemented in early 2021.

Tim Hortons, who is best known for breakfast and coffee, also had a tough quarter. Sales fell 14% in Canada, where it is located and has approximately 5,000 restaurants.

“The spread of Covid-19 and the resulting number of home orders have had a particularly significant effect on routine high-frequency morning visits, which are a particularly important part of our business in Canada, given our high visitor rate.” , said Cil.

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