Industry News | April 23, 2015 | QSR Exclusive Brief

For McDonald's, All-Day Breakfast Could Win Big

image used with permission.

On Monday, April 20, McDonald’s began testing all-day breakfast in the San Diego area. And according to new data from a consumer perception research firm, such a move could be a major boon for the brand.

YouGov BrandIndex ranked McDonald’s second for purchase consideration among frequent breakfast patrons. The study asked consumers who eat a fast-food breakfast at least once a month where they would be likely to eat next, regardless of whether it was for breakfast or another daypart. The results indicated that 41.8 percent of participants would choose McDonald’s. The brand was bested only by Subway.

“McDonald's seems to be playing toward its strengths so that the strategy seems to make sense,” says Ted Marzilli, CEO of YouGov. “The caveat being of course that it's not a trivial decision to decide to do breakfast all day. They have to reconfigure kitchens or reconfigure the setup of how you position different food items so it's not necessarily easy … to execute.”

McDonald’s has long considered all-day breakfast, but operational constraints—like the ones cited by Marzilli—were likely deterrents. During the test, participating San Diego stores will serve a limited breakfast menu of nine items throughout the day, including the iconic Egg McMuffin, hot cakes, and hash browns.
“They’re going after a segment among [in] which they're already strong. It seems like there might be a ready-built audience for the all-day breakfast,” Marzilli says.

Subway, which took the No. 1 slot at 48.1 percent, started serving breakfast at its domestic locations in 2010. The menu is comprised of only four flatbread sandwiches with calorie counts between 360 and 430. Given how similar Subway’s breakfast menu is to its core offerings of sandwiches and subs, all-day breakfast could be less complicated compared to brands like McDonald’s that serve everything from muffins, bagels, and biscuits to parfaits and oatmeal.

For operators considering a move to all-day breakfast, Marzilli would advise them to conduct specific research on their clients to determine their receptivity.

Brands might also consider testing on a small scale.

“Individual operators or franchisees could extend hours as you said, maybe provide a limited breakfast menu later into the day. I think those are good ideas and they're lower cost, lower risk ways to try this out rather than commit to a 24-hour or breakfast-all-day, full menu. I think it would make sense to test the waters that way,” Marzilli says.


By Nicole Duncan

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