Competition among fast-food chains for the breakfast dollar is getting as hot as a griddle.
San Diego-based Jack in the Box and others are bolstering their breakfast menus to pick off market share from breakfast king McDonald's, which makes nearly one-third of its sales to customers in the dawn hours.
HOWARD LIPIN / Union-Tribune
Joanna Garcia (left) and Jaime Carmona served Patrick Lim a breakfast burrito at a Jack in the Box in El Cajon.
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Jack in the Box has added buttermilk biscuit sandwiches and Minute Maid orange juice to its menu.
Wendy's, which had a previous failure with breakfast items, is test-marketing breakfast in three markets.
Starbucks is offering warm breakfast sandwiches at selected locations in six markets.
And fast-food breakfast leader McDonald's is considering serving breakfast all day long at its 13,700 stores.
Robert Chassar, a San Diego concrete pumper, doesn't like making his own breakfast at home, so he's one of those who drops by fast-food restaurants at least three times a week for his morning meal.
“It's quick and it's good,” said Chassar, who was waiting the other day for an ultimate breakfast sandwich combo – jumbo bun, bacon, American cheese and grilled eggs – at the Jack in the Box on Navajo Road in El Cajon. “Almost everybody's selling breakfast now.”
Breakfast now accounts for between $38 billion and $40 billion – or about 8 percent – of the $500 billion in U.S. restaurant sales. Sixty percent of the bacon-and-eggs business has been cornered by fast-food companies, said Ron Paul, president of Technomic, a Chicago-based food research company.
“McDonald's owns breakfast and others want a piece of it,” said Paul.
HOWARD LIPIN / Union-Tribune
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McDonald's, based in Oak Park, Ill., said sales of McMuffins, sausage biscuits and other breakfast fare jumped 7 percent in its third quarter, following the debut of premium-roast coffee earlier this year.
The company also said it was looking at the possibility of serving breakfast all day alongside its Big Macs.
“More people are eating breakfast on the go, and they want something portable,” said Stuart Morris, president of QSR Consulting Group in Coronado.
Jack in the Box, for instance, is currently running a TV advertising campaign extolling such breakfast items as its new buttermilk biscuit sandwiches.
“Breakfast has always been an important part of our business,” said company spokeswoman Kathleen Finn, noting that it was the first fast-food chain to introduce a breakfast sandwich, in 1969.
Finn declined to divulge breakfast sales at the 2,000-plus-unit chain, which has breakfast Jacks and ciabatta breakfast sandwiches on the menu.
Mark Sheridan, an analyst who covers the company for Johnson Rice & Co. in New Orleans, estimated that Jack in the Box's morning business accounts for 10 percent to 15 percent of its revenues.
Columbus, Ohio-based Wendy's – which has not served breakfast in about 20 years – is test-marketing a variety of sandwiches and “omelette bites” in three cities, with the idea of rolling out the concept nationwide. No final decision has been made.
The company expects to add an average of $160,000 in breakfast revenues at each of its 6,300 stores in North America – an 11 percent total sales gain – within three years of the rollout, said Wendy's spokesman Bob Bertini. He said per-store sales currently averaged $1.3 million.
“We tried serving breakfast once, but it wasn't successful because it was built along traditional lines,” said Bertini. “It was geared more for eating inside than for on-the-go driving.”
Even Seattle-based Starbucks, a peripheral player in the fast-food business, is expanding its line of pastries with warm breakfast sandwiches in Seattle; Washington, D.C.; Portland, Ore.; San Francisco; Chicago; and New York. The company “continues to look at new areas to introduce our warm breakfast sandwich program,” said Starbucks representative Robyn Bennett. Adding breakfast is a relatively inexpensive way for fast-food chains to boost profits.
For one thing, egg-and-biscuit dishes have a higher profit margin than meat entrees, said Sherri Daye Scott, editor of QSR magazine.
Companies such as Wendy's, “where the building's not open a part of the day,” will benefit by making breakfast work, she said.
Scott added that McDonald's likely won't face much difficulty in refitting kitchens if it decides to serve breakfast all day, despite already crowded menu boards.
“It can be done. . . . McDonald's will need a strong operating plan and will have to retrain some employees,” she said.
Jack in the Box, for one, has served breakfast all day for years.
Although expanding breakfast menus makes business sense for the fast-food operators, nutritionists are worried about expanding waistlines.
Many fast-food breakfast offerings are variations on eggs, meat, biscuits and cheese, and come with high levels of fat and calories, they note.
“It's no more healthy than what fast-food companies serve at lunch or dinner,” said Jayne Hurley, senior nutritionist at the Center for Science in the Public Interest in Washington, D.C. “Artery-clogging fat is not a good choice for breakfast.”
A sausage, cheese and egg biscuit at Jack in the Box, for instance, comes with 55 grams of fat – 17 grams of it saturated fat and 6 grams of the trans-fat variety. The U.S. government recommends that a 2,000-calorie diet contain no more than 65 grams of fat and 20 grams of saturated fat each day.
Finn of Jack in the Box said the company provides nutritional information on its Web site and at its restaurants on request. The food is made to order, so customers can tailor to some extent the ingredients in menu items, she said.
For Pat Whitson, a La Mesa psychotherapist, the convenience of a fast-food breakfast sometimes outweighs nutritional concerns.
“If I take time to make breakfast at home, it's an egg on dry toast,” said Whitson, who eats breakfast at Jack in the Box and other chains about once every two weeks. “I know I'm mainlining fat every time I do it. . . . I end up spending more time on the bicycle at the gym.”
Frank Green: (619) 293-1233; frank.green@uniontrib.com
